(d) pursuant to Section 502(d), provide that any and all claims against the Debtors AT&T filed in these cases will be disallowed until it repays in full the Transfers plus all applicable interest; and

(e) award to the Committee all costs, reasonable attorneys' fees and interest.

Headquartered in Vancouver, British Columbia, 360networks, Inc. -- http://www.360.net/-- is a leading independent provider of fiber optic communications network products and services worldwide. The Company filed for chapter 11 protection on June 28, 2001 (Bankr. S.D.N.Y. Case No. 01-13721), obtained confirmation of a plan on October 1, 2002, and emerged from chapter 11 on November 12, 2002. Alan J. Lipkin, Esq., and Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, represent the Company before the Bankruptcy Court. When the Debtors filed for protection from its creditors, they listed $6,326,000,000 in assets and $3,597,000,000 in liabilities. (360 Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000)

The Company's total operating revenue from continuing operations for the quarter ended March 31, 2004 was $35.2 million, which is comparable to $32.5 million in the fourth quarter of 2003 and an increase of 16 percent from $30.4 million in the first quarter of 2003. Revenue in the first quarter of 2004 included recognition of approximately $6.4 million in non-recurring revenue from a discontinued network service offering.

For the three months ended March 31, 2004, the Company earned operating income of $0.9 million compared to an operating loss of $4.1 million for the fourth quarter of 2003 and an operating loss of $12.6 million in the first quarter of 2003. The Company's net income was $0.6 million in the first quarter of 2004 compared to a loss of $4.5 million in the fourth quarter of 2003 and $14.9 million in the first quarter of 2003. The net income per diluted common share was $0.03 in the first quarter of 2004 versus a net loss per diluted common share of $2.55 in the first quarter of 2003.

Highlights of the first quarter

- Recorded EBITDA of $2.6 million in the first quarter of 2004

- Expanded local dial tone service in the states of New York and New Jersey

- Completed consolidation of network operating centers in San Diego and Pittsburgh

"We are starting to realize the results of our achievements in 2003. With a strengthened foundation and the right strategies, structure and people in place, we believe Acceris is poised to generate significant growth," said Kelly Murumets, President of Acceris Communications.

Acceris Communications' March 31, 2004 balance sheet shows a total stockholders' deficit of $47,292,000 compared to a deficit of $49,309,000 at December 31, 2003.

About Acceris

Acceris is a broad based communications company serving residential, small and medium-sized business and large enterprise customers in the United States. A facilities-based carrier, it provides a range of products including local dial tone and 1+ domestic and international long distance voice services, as well as fully managed and fully integrated data and enhanced services. Acceris offers its communications products and services both directly and through a network of independent agents, primarily via multi-level marketing and commercial agent programs. Acceris also offers a proven network convergence solution for voice and data in Voice over Internet Protocol communications technology and holds two foundational patents in the VoIP space. For further information, visit Acceris' website at http://www.acceris.com/

AIR CANADA: Reports Improved April 2004 Traffic Results-------------------------------------------------------Air Canada mainline flew 22.3 percent more revenue passenger miles (RPMs) in April 2004 than in April 2003, according to preliminary traffic figures. Overall, capacity increased by 9.5 percent, resulting in a load factor of 77.7 percent, compared to 69.6 percent in April 2003; an increase of 8.1 percentage points.

Jazz, Air Canada's regional airline subsidiary, flew 12.5 percent more revenue passenger miles in April 2004 than in April 2003, according to preliminary traffic figures. Capacity increased by 6.3 percent, resulting in a load factor of 61.1 percent, compared to 57.7 percent in April 2003; an increase of 3.4 percentage points.

"A very strong performance in our domestic operations as evidenced by the 17.4% growth in traffic which far outstripped the 4.3% growth in domestic capacity as well as continued strength in other sectors led to our highest ever system load factor for the month of April. International traffic levels, boosted by the expansion to additional Latin American destinations and to Delhi also contributed to the record 77.7 load factor. Year over yearcomparison reflects the severe negative impact of SARS and the war in Iraq on demand for air travel in 2003," said Rob Peterson, Executive Vice President and Chief Financial Officer.

Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and C$9,704,000,000 in liabilities.

At the same time, Standard & Poor's affirmed its existing ratings, including the 'BB' corporate credit rating, on Allied Waste. The outlook is stable. Scottsdale, Arizona-based Allied Waste is the second-largest solid waste management firm in the U.S. and has about $8 billion of debt outstanding.

Proceeds of the debt securities, if issued, would be used for repaying or refinancing existing indebtedness, working capital, capital expenditures, and potential acquisitions.

Allied Waste provides collection, transfer, disposal, and recycling services to about 10 million residential, commercial, and industrial customers in 37 states, generating about $5 billion in annual revenues. A national network of facilities creates opportunities for modest growth through internal development, focusing on the vertical integration business model. The firm's market position is enhanced by a low cost structure, very good collection-route density, and a high rate of waste internalization.

Allied Waste's weak financial profile stems mainly from high debt levels incurred in the 1999 acquisition of Browning-Ferris Industries Inc. Debt reduction was accelerated in 2003 from the issuance of common equity and mandatory convertible preferred stock, the proceeds from divestitures, and free cash flow. A recent agreement with the holders of Allied Waste's $1 billion preferred stock to convert it into common stock improves the capital structure and saves about $500 million in cash over the next six years by eliminating future dividend payments. In the intermediate term, debt to EBITDA should be in the 4x-5x range, EBITDA and EBIT interest coverages approximately 2.5x and 1.75x, respectively, and debt to capital in the 70%-75% range. Additional strengthening is expected longer term.

The Debtors seek the Court's authority to enter into a settlement agreement with Ricted.

Pursuant to the Ricted Settlement Agreement, Ricted agreed to pay the Debtors $95,993 and waive its administrative claim against them. The Debtors, in exchange, agreed to release Ricted from any further obligations.

Joseph Grey, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, asserts that the Ricted Settlement Agreement is beneficial to the interests of the Debtors, their estate and their creditors because the prosecution of the Debtors' claims against Ricted and the disposition of the Ricted administrative claim could be expensive and time-consuming. Without waiving any arguments that are raised in the Ricted Adversary Action, the Debtors believe that it is reasonably likely that Ricted's claim could be ultimately allowed as an unsecured claim. If that were to occur, then the $200,000 by which the Debtors' claim against Ricted is being reduced in the Settlement is within the range of distributions predicted for unsecured creditors.

The mortgage pool consists of closed-end, first lien subprime mortgage loans that may or may not conform to Freddie Mac and Fannie Mae loan limits. As of the Cut-Off date (May 1, 2004), the mortgage loans have an aggregate balance of $1,100,000,000. The weighted average loan rate is approximately 7.16%. The weighted average remaining term to maturity (WAM) is 356 months. The average Cut-Off date principal balance of the mortgage loans is approximately $173,424. The weighted average original loan-to-value ratio (OLTV) is 79.50% and the weighted average Fair, Isaac & Co. (FICO) score was 600. The properties are primarily located in California (34.73%), Florida (8.22%) and Illinois (7.58%).

Approximately 88.54% of the loans were originated or acquired by Argent Mortgage Company, LLC, and 11.46% of the loans originated or acquired by Olympus Mortgage Company. Both mortgage companies are subsidiaries of Ameriquest Mortgage Company, a specialty finance company engaged in the business of originating, purchasing and selling retail and wholesale subprime mortgage loans. Both Argent and Olympus focus primarily on wholesale subprime mortgage loans.

ATLAS COLD: Ontario Securities Commission Lifts Cease Trade Order -----------------------------------------------------------------With regards to the Ontario Securities Commission's Temporary Management Cease Trade order dated December 2, 2003 and extended December 15, 2003, the filing default having been remedied and the above Cease Trading Order(s) have been allowed to Lapse/Expire as of May 11, 2004.

As reported in the Troubled Company Reporter's February 4, 2004edition, Atlas is in the process of attempting to negotiate anagreement with its lenders under the Credit Agreement whereby thelenders will deal with the existing defaults under the CreditAgreement. The agreement being sought by Atlas will continue thecap on availability at amounts presently outstanding and imposeadditional reporting, financial and other covenants on Atlas. Theagreement will also provide the terms upon which the creditfacilities will remain in place until their scheduled maturity onJuly 24, 2004. The principal terms of the agreement are subject tocontinuing negotiation and it is not certain that an agreementwill be reached. The failure to obtain such an agreement may havea material adverse impact on the Trust's financial position,results of operations and cash flows.

BRIDGEPORT HOLDINGS: Micro Warehouse Equity Auction is on May 19----------------------------------------------------------------On April 20, 2004, the U.S. Bankruptcy Court for the District of Delaware entered an order approving uniform bidding procedures designed to flush-out the highest and best bid for BridgePort Holdings Inc.'s equity interests in Micro Warehouse Holding B.V.

CHAPARRAL RESOURCES: Strained Liquidity Spurs Going Concern Doubt-----------------------------------------------------------------Chaparral Resources, Inc.'s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Chaparral has a working capital deficiency as of December 31, 2003. In addition, it has experienced limitations in obtaining 100% export quota for the sale of its hydrocarbons. These conditions create uncertainties relating to the Company's ability to meet all expenditure and cash flow requirements through the next twelve months. Additionally, these conditions raise substantial doubt about the Company's ability to continue as a going concern.

Chaparral has been successful in 2003 in increasing its export sales and reducing its local market deliveries. As of December 31, 2003, Chaparral has sold approximately 2,694,000 barrels of its current year production, of which approximately 2,591,000 barrels, or 96%, have been sold at world market prices and 103,000 barrels, or 4%, have been sold at domestic market prices. This represents a significant increase in sales at world market prices and corresponding decrease in local market price sales from the year 2002.

In addition, the Company is continuing with its efforts to obtain additional financing to cover any short-term working capital deficiencies and to refinance its loan with Kazkommertsbank on more favorable terms. If successful in these efforts, Chaparral plans to use the resulting capital infusion to restructure the loan with Kazkommertsbank and eliminate or significantly reduce the Company's current working capital deficiencies.

Liquidity and Capital Resources

Chaparral Resources is presently engaged in the development of the Karakuduk Field, which requires substantial cash expenditures for drilling costs, well completions, workovers, oil storage and processing facilities, pipelines, gathering systems, water injection facilities, plant and equipment (pumps, transformer sub-stations etc.) and other field facilities. The Company has invested approximately $121.3 million in the development of the Karakuduk Field and has drilled or re-completed 45 productive wells by the end of 2003, including 12 wells in the year 2003. Total capital expenditures for 2003 were approximately $27.7 million compared to total capital expenditures of $11.5 million incurred in 2002. Capital expenditures are estimated to be at least $80 million from 2004 through 2008, including the drilling of approximately 65 more wells over this period. Management anticipates 2004 capital expenditures of approximately $28.4 million.

CHYRON CORP: Reports $1.5M Stockholders' Deficit at March 31, 2004------------------------------------------------------------------Chyron Corporation (OTCBB: CYRO) announced that it had net income of $0.3 million, or $.01 per share, on revenues of $5.8 million for its first quarter ended March 31, 2004.

Revenues for the first quarter increased 9% as compared to the same quarter last year and the Company experienced a sequential revenue increase of 8% from the fourth quarter of 2003.

The Company's net income for the first quarter of $0.3 million, or $.01 per share, compares to net income of $0.1 million, or $.00 per share, for the first quarter of 2003. The first quarter of 2003 net income included a loss from continuing operations of $0.1 million, or $.00 per share and income from discontinued operations of $0.2 million, or $.00 per share. In the fourth quarter of 2003, the Company had net income of $2.1 million, or $.05 per share, consisting of a loss of $0.2 million, or $.00 per share, from continuing operations, and income of $2.3 million, or $.05 per share, from discontinued operations, including a $2.6 million gain on sale of the Company's signal distribution and automation business. Included in the first quarter of 2004 net income was a gain on the sale of marketable securities of $0.2 million. The first quarter of 2003 loss from continuing operations included a $0.2 million loss on the write down of marketable securities and the fourth quarter of 2003 loss from continuing operations included a gain on debt extinguishment of $0.6 million. Interest expense for the first quarter was $0.2 million as compared to $0.5 million in the first quarter of 2003 and $0.5 million in the fourth quarter of 2003.

On a first quarter of 2004 to first quarter of 2003 continuing operations comparison basis, revenues and gross margins both grew, resulting in a $0.5 million higher gross profit in the first quarter of 2004. Selling, general and administrative expenses grew, primarily as a result of a portion of such expenses no longer being shared with the discontinued signal distribution and automation operations. Research and development costs for new products grew by $0.3 million or 53% as compared to the first quarter of 2003.

The Company reported $3.0 million of cash at the end of the first quarter. The Company used $3.8 million of cash to complete its retirement of the remaining Series A and B debentures during the quarter. As a result, the Company's obligations owing under debentures decreased from $8.7 million of debentures paying 12% interest to $4.6 million of new debentures, split between new Series C debentures maturing at the end of 2005 and paying 7% annual interest in kind, and new Series D debentures maturing at the end of 2006 and paying 8% annual interest in kind.

Michael Wellesley-Wesley, Chyron President and CEO commented: "We are pleased with the first quarter improvement in our revenues, gross margin and profitability. Our increased focus on research and development was rewarded at the NAB tradeshow in April, where we won two major awards for new products. Our new HyperX multi-format high definition (HD) character generator graphics system won the prestigious Broadcast Engineering Magazine Pick Hit Award for its superior technology, ease of use and affordability. Our C-Mix high definition (HD) graphics mixer won TV Technology Magazine's prestigious Mario Award." Mr. Wellesley-Wesley then added, "The successful completion of our debt retirement and restructuring in February has significantly reduced our debt load and has allowed us to focus resources on marketing and making additional investments in product development. As consumer demand for HDTV programming increases, we remain optimistic that the increased levels of industry spending we are beginning to experience will continue to grow."

At March 31, 2004, Chyron Corporation's balance sheet shows a total stockholders' deficit of about $1.5 million compared to a deficit of about $1.6 million at December 31, 2003.

About Chyron

Chyron, The Company the Whole World Watches, is a leading developer of broadcast television graphics hardware and software ranging from high-definition turnkey systems to OEM board-level solutions. Since introducing its first character generator in 1970, Chyron has become an industry standard whose brand name is synonymous with broadcast television graphics. Chyron's current product line includes the Duet/Lyric family of graphic and animation systems, Aprisa still and clip store systems, video mixing solutions, telestration, OEM board-level products, asset management, and more. For more information about Chyron products and services, please visit the company website at http://www.chyron.com/

At the same time, Standard & Poor's affirmed its 'B+' senior secured debt rating on Concentra Operating Corp.'s existing senior secured debt, assigned its 'B+' senior secured debt rating to the company's proposed $70 million of additional term debt, and assigned its '2' recovery rating to all of the company's senior secured credit facility. This facility comprises a $100 million revolving credit facility, an existing $332.5 million in term debt maturing in 2009, and a proposed $70 million of additional term debt maturing in 2009. The '2' recovery rating indicates that Standard & Poor's expects a substantial recovery of principal (80%-100%) in the event of default.

Standard & Poor's also affirmed its 'B-' subordinated debt rating on the company's existing $180 million of 9.5% senior subordinated notes maturing in 2010 and assigned the same rating to Concentra's proposed $150 million senior subordinated notes maturing in 2012.

The outlook is negative.

Standard & Poor's expects Concentra to use about $48 million of on-hand cash, the proceeds from the $70 million of additional senior secured term debt, and the $150 million of new senior subordinated notes to retire its $142.5 million 13% senior subordinated notes and $5.8 million of accrued interst. The company will also pay a $97 million dividend to its shareholders, and pay for approximately $22 million of related fees, expenses, and tender premium costs.

After the transaction, Concentra will have approximately $790 million of debt outstanding (including $57.9 million of holding company debt).

"The low-speculative-grade ratings on Concentra reflect the company's relatively narrow business focus and its vulnerability to weakness in the U.S. economy, particularly relating to employment levels," said Standard & Poor's credit analyst Jesse Juliano. "In addition, although Concentra has a lower total cost of capital, has near-full availability of its $100 million revolving credit facility, and faces no near-term debt maturities, its leverage continues to be high."

These concerns are partially offset by the company's diverse payor mix, its ability to function in the challenging employment environment of the past three years, and its improved operating performance in 2003 and early 2004.

In addition to providing health services for workplace injuries, privately held Concentra, based in Addison, Texas, offers in-network and out-of-network bill review, repricing, and negotiation services designed to reduce its clients' medical and administrative costs. The company also offers management services that coordinate medical care to reduce disability duration. Concentra operates nationwide and has a well-diversified clientele that includes employers and providers of workers' compensation, automobile insurance, and group health and related employee benefits. Revenue is paid on a fee-for-service or percentage-of-savings basis, or with a flat fee.

CONSOLIDATED FREIGHTWAYS: Selling Major Fla. Facilities on May 20-----------------------------------------------------------------As part of the largest real estate sale in transportation history -- 228 total properties with an appraised value over $400 million -- Consolidated Freightways announced that it is placing three of its largest Florida facilities for sale to the highest bidders on May 20.

Two of the properties are located in Orlando and will be sold either separately or as whole, through an open auction process. 238 CF employees formerly worked at the Orlando facilities. The northern Orlando terminal consists of a 97-door cross-dock distribution facility situated on 16.91 acres and is located at 828 West Taft Vineland Rd. A contract price for the northern terminal has been established at $4,200,000.

The southern terminal consists of an 85-door cross-dock distribution facility situated on 17.29 acres, located at 10066 General Drive. A contract price has been established for the southern terminal of $3,400,000.

The contract price to purchase the entire Orlando property is $7,600,000.

A third terminal in Jacksonville is also for sale to the highest bidder through a reserve auction process on May 20. The Jacksonville facility is located at 2120 North Lane Ave. Industrial Park. It is a 64-door cross-dock terminal situated on 6.61 acres. Seventy-seven CF employees formerly worked at the Jacksonville terminal.

A starting price of $895,000 has been established for the Jacksonville property.

All terminals have been closed to operations since September 3, 2002 when the 75-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court.

Interested parties who would like to participate in the May bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction.

To date, 198 CF properties throughout the U.S. have been sold for over $335 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's web site -- http://www.cfterminals.com- - to Transportation Property Company at 800-440-5155.

CONSOLIDATED FREIGHTWAYS: Detroit Facility Up For Sale on May 20----------------------------------------------------------------As part of the largest real estate sale in transportation history -- 228 total properties with an appraised value over $400 million -- Consolidated Freightways announced that it is placing its Detroit distribution facility located at 9860 Eagle Ave., in Dearborn for sale to the highest bidder, through a reserve auction process scheduled for May 20, 2004. A contiguous 4.62 acre property is also included in the sale.

The Detroit property is a 96-door cross-dock distribution facility situated on 7.26 acres and has been closed to operations since September 3, 2002 when the 75-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. 238 CF employees formerly worked at the Detroit terminal.

A starting price of $895,000 has been established for the CF properties. Interested parties who would like to participate in the May bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction.

To date, 198 CF properties throughout the U.S. have been sold for over $335 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's web site -- http://www.cfterminals.com/-- to Transportation Property Company at 800-440-5155.

CORECOMM NEW YORK: Court Fixes May 24 Deadline to File Claims-------------------------------------------------------------On April 8, 2004, the U.S. Bankruptcy Court for the Southern District of New York entered an order fixing a deadline for creditors to file proofs of claim against Corecomm New York Inc. and its debtor-affiliates.

The Court fixes May 24, 2004 at 5:00 p.m. as the deadline to file proofs of claim. Claim forms must be delivered to:

If by mail:

U.S. Bankruptcy Court Southern District of New York RE: Corecomm New York, Inc., et al. P.O. Box 5077 Bowling Green Station New York, NY 10274

If by hand or overnight courier:

U.S. Bankruptcy Court Southern District of New York RE: Corecomm New York, Inc., et al. One Bowling Green Room 511 New York, NY 10004-1408

Exempted from the Bar Date are claims:

(i) already filed with the Clerk of Court; (ii) listed on the Debtor's Schedule; (iii) previously allowed by the order of the Court; (iv) already paid by the Debtors; (v) consisting as an expense of administration; (vi) based solely on an interest in any Debtor; (vii) limited exclusively to the repayment of principal, interest or applicable fees and charges arising from notes issued by the Debtors; and (viii) on account of customer deposits for services provided by the Debtors.

New York-based CoreComm, which provides local and long-distance phone service and Internet access, filed for chapter 11 protection on January 15, 2004 (Bankr. S.D.N.Y. Case No. 04-10214). Willkie Farr & Gallager LLP represents the Debtor in its restructuring efforts.

CORPORATE MEDIA: Americana Publishing Gains $2MM from Liquidation-----------------------------------------------------------------Americana Publishing, Inc. (OTC Bulletin Board: APBH) announced that the liquidation through bankruptcy of its wholly owned subsidiary, Corporate Media Group, Inc. (CMG), will result in a one-time extraordinary gain for this quarter of $2,166,803. The gain is attributable to the discharge of debt through the bankruptcy process in the amount of $3,686,233, reduced by $1,519,430, the carrying value of CMG's assets. Although an adversarial claim is still pending concerning the former president of CMG, no other creditors directly related to the bankruptcy have filed claims, thus resulting in the aforementioned gain.

Americana Publishing, Inc. is a vertically integrated multimedia publishing company whose primary business is publishing and selling audio books, print books and electronic books in a variety of genres. Sales of its products are conducted through the Internet, as well as a distribution network of more than 35,000, retail stores, libraries and truck stops. According to the Audio Publishers Association (APA), annual sales of audio books are nearly $2 billion. Currently 42 million Americans listen to audio books and 58 percent of that group listen to more than 2 per month. * * *

GOING CONCERN UNCERTAINTY

In its Form 10-KSB for the fiscal year ended December 31, 2003, Americana Publishing, Inc. states:

"Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the years ended December 31, 2003 and 2002, we incurred losses of $2,520,972 and $2,615,518, respectively. In addition, as of December 31, 2003, our total current liabilities exceeded ourtotal current assets by $2,895,438, and our shareholders' deficit was $2,525,828. These factors, among others, raise substantial doubt about our ability to continue as a going concern."

COVAD COMMS: Employee Stock Acctg. Issue Delays Form 10-Q Filing ----------------------------------------------------------------Covad Communications Group, Inc. (OTCBB:COVD), a leading national broadband service provider of high-speed Internet and network access, announced that it will file for a five-day extension with the Securities and Exchange Commission to submit its Form 10-Q for the first quarter of 2004.

The delay is being requested because of a lone accounting issue regarding treatment of stock issued to Covad employees under its 2003 Employee Stock Purchase Plan (ESPP). The company is still in the process of determining the full extent of the non-cash compensation expense adjustments, if any, that will be required and the period or periods in which the expense will be recorded. However, Covad notes that any compensation charge that it is required to record will have no impact on future cash flow.

Covad is able to report cash usage for the first quarter of 2004 of $11 million, including cash equivalents, short-term investments, restricted cash and investments, but excluding net proceeds associated with its issuance of $125 million of convertible debentures and retirement of $50 million in notes payable. For the first quarter, digital subscriber lines decreased by 1,200 from the fourth quarter 2003 primarily because of shifting partner sales strategies.

Covad also reconfirms the guidance for the first quarter 2004 that was provided in February. For the first quarter of 2004 revenue is expected to be $106 - 109 million, broadband subscription billings $88 - 91 million, net loss $13 - 17 million, and EBITDA profit to be $3 - 6 million. Please refer to the attached table for additional information, including a reconciliation of the non-GAAP financial performance measures to the most comparable GAAP measures.

Covad will issue first quarter results and conduct a conference call for investors as soon as the analysis is complete.

About Covad Communications

Covad -- whose December 31, 2003 balance sheet shows a total stockholders' equity deficit of $5,553,000 -- is a leading national broadband service provider of high-speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. It offers DSL, T1, hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad's network and through Internet Service Providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas (MSAs) and can be purchased by more than 57 million homes and businesses, which represent over 50 percent of all US homes and businesses. Corporate headquarters is located at 110 Rio Robles San Jose, CA 95134. Telephone: 1-888-GO-COVAD. Web Site: http://www.covad.com/

COVANTA: Danielson Appoints Horowitz As Interim President & CEO---------------------------------------------------------------Danielson Holding Corporation (Amex: DHC) announced that Jeffrey R. Horowitz, 54, has been named the Company's interim President and Chief Executive Officer, succeeding Samuel Zell as the Company's President and Chief Executive Officer. Mr. Zell currently remains as Chairman of the Company's Board of Directors. Mr. Zell had previously announced his intention to step down from these positions before the end of the year.

Mr. Horowitz previously served as Senior Vice President, General Counsel and Secretary of Covanta Energy Corporation prior to its acquisition by the Company.

Mr. Zell stated, "I have complete confidence in Jeff and his ability to coordinate the integration of Danielson and Covanta, a business with which Jeff is very familiar. Jeff's appointment will also allow Covanta CEO, Tony Orlando, to focus all of his efforts on the management and strategic planning of Covanta in this critical period following its emergence from bankruptcy. Jeff will also be active in assisting the Danielson Board in choosing a permanent CEO."

"I am excited about the opportunity," noted Mr. Horowitz, "and I look forward to working with Danielson to commence its previously announced rights offering in the second quarter and continuing to work with Covanta's outstanding management team as we integrate Covanta with the Danielson organization."

Danielson Holding Corporation is an American Stock Exchange listed company, engaging in the energy, financial services and specialty insurance business through its subsidiaries. Danielson's charter contains restrictions that prohibit parties from acquiring 5% or more of Danielson's common stock without its prior consent.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000)

DAN RIVER: Employs Woolard Harris as Chief Restructuring Officer----------------------------------------------------------------Dan River Inc., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Northern District of Georgia, Newnan Division, to employ Woolard Harris as Chief Restructuring Officer for Operations to provide operational management and advisory services to the Debtors.

The Debtors want to hire Mr. Harris because of his experience, knowledge and reputation in operating troubled textile companies, including in the context of Chapter 11 proceedings, selected Mr. Harris, a partner with Carl Marks Consulting Group LLC. The Debtors believe that Mr. Harris possesses the requisite expertise and is well qualified to provide the operational advisory services that will be required in Dan River's cases.

Mr. Harris will charge the Debtors his current hourly rate of $550 per hour.

Headquartered in Danville, Virginia, Dan River Inc. -- http://www.danriver.com/-- is a designer, manufacturer and and marketer of textile products for the home fashions, apparel fabrics and industrial markets. The Company filed for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $441,800,000 in total assets and $371,800,000 in total debts.

DELTA AIR LINES: Bankruptcy Risk Prompts S&P's Negative Outlook ---------------------------------------------------------------Standard & Poor's Ratings Services affirmed its ratings on Delta Air Lines Inc. (B-/Negative/--) and revised the long-term rating outlook to negative from stable. Delta disclosed in its first-quarter 2004 10Q filing with the SEC that failure to secure needed cost reductions, regain profitability, and maintain access to the capital markets could force the company to file for bankruptcy. "The warning makes explicit what previous company statements had hinted at, and may indicate that Delta believes it will have to move to the brink of bankruptcy to persuade its pilots to grant concessions," said Standard & Poor's credit analyst Philip Baggaley.

Delta's pilots' union has thus far offered only limited concessions that fall far short of what management is seeking. The negotiating process is being slowed by a sweeping strategy review, to be completed by the end of the second quarter, being undertaken for Delta's CEO, and by the fact that normal scheduled egotiations with the pilots do not start until August 2004. In the company's 10Q, management lowered its previous guidance for 2004 operating cash flow, saying cash from operations will be sufficient to fund daily operations plus only a portion of the planned $300 million of nonaircraft capital expenditures. Delta agreed on May 3, 2004, to recall 1,060 pilots furloughed after the Sept. 11, 2001, attacks, following an arbitrator's ruling against the airline, even though current operations do not need them, adding to the company's expenses.

Ratings on Delta, the third-largest U.S. airline, were lowered to current levels March 17, 2004. The ratings reflect financial damage from heavy losses over the past several years; a high operating cost structure; substantial debt, lease, and postretirement liabilities; and ongoing risks associated with the company's participation in the cyclical and price-competitive airline industry. Positive factors are the company's solid market position in the U.S. domestic and trans-Atlantic markets and the work rule flexibility and productivity made possible by a mostly nonunion work force. Given the slow pace of pilot contract negotiations, Delta will likely continue to report the heaviest losses among U.S. airlines, consuming cash and undermining its already weakened balance sheet.

Delta reported a $383 million net loss for the first quarter of 2004, in line with previous guidance. Delta's CEO, Gerry Grinstein, portrayed the trend of losses and declining liquidity as "clearly unsustainable over the long term," and described the company's balance sheet as "severely damaged to the point of exhaustion." Delta's pretax loss margin of negative 18.2% was far worse than that of other large U.S. airlines.

Ratings anticipate continued heavy, though gradually declining losses, and a reduction in cash balances. Negotiations with pilots for cost concessions could last into late 2004 or even 2005, when their contract becomes amendable. Failure to make progress on those talks, or worse-than-anticipated financial results, could result in a downgrade.

(a) approve the terms and conditions of a Purchase and Sale Agreement between Intermarine, Inc., and KBR, Inc.;

(b) approve the terms and conditions of a binding letter of intent agreement between North Shore Supply Company, Inc., and KBR; and

(c) authorize the consummation of the contemplated transactions without further Court approval.

The Greens Bayou Fabrication Yard

KBR operates three distinct businesses at a property known as the "Greens Bayou Fabrication Yard." The three businesses are:

* the KBR fabrication business;

* the Joe D. Hughes stevedoring business that is the subject of the Intermarine Agreement; and

* the pipe mill business that is the subject of the North Shore Agreement.

Michael G. Zanic, Esq., at Kirkpatrick & Lockhart, LLP, informs the Court that the KBR fabrication business has historically been the Yard's main source of revenue. KBR has performed some significant projects at the Yard, building some of the largest and most complex structures for the offshore oil and gas market. Market conditions, however, have forced KBR to reconsider its business strategy as it relates to the Yard. In particular, the major oil and gas companies have deferred and cancelled the construction of large offshore fabrication platforms and the KBR fabrication business at the Yard has not been engaged in a major oil and gas fabrication project in a number of years. In addition, KBR's lack of continued investment in its fabrication business, as well as higher labor costs, have been the principal reasons for KBR's inability to remain competitive in its bids for new fabrication work.

The Joe D. Hughes Business and the Pipe Mill Business are secondary businesses. KBR can no longer justify continuedcapital investment in the Joe D. Hughes Business and the Pipe Mill Business without a much larger and more profitable fabrication business to support them. The operational costs formaintaining the Yard have made these two secondary businesses marginal at best and KBR made the determination to refocus its business efforts on the engineering and construction servicesaspect of its business which has traditionally been the core revenue generating segment of KBR's overall business.

After extensive internal discussions and analysis, the Debtors decided to sell these secondary businesses. Although the decision to sell these businesses were made over a year and a half ago, it was not until recently that the Debtors were able to secure strong purchase offers from qualified buyers for the Joe D. Hughes Property and the Pipe Mill Property.

Mr. Zanic notes that the sale of the Joe D. Hughes Business and the Pipe Mill Business pursuant to the Intermarine Agreement and the North Shore Agreement are separate and distinct sale transactions and the closing of each transaction is not contingent on the Court's approval of the other.

The Intermarine Agreement

Pursuant to the Intermarine Agreement, KBR has agreed to sell certain of its real estate, assets, equipment, inventory, improvements, and on-going business activities related to the Joe D. Hughes Business to Intermarine.

Specifically, KBR will sell to Intermarine:

(1) certain real property located at 14305 Industrial Road, in Harris County, Texas;

(2) all improvements, KBR's utility infrastructure, and fixtures of any kind attached to the Land or located in the property, together with all appurtenances; and

(3) certain equipment located on the Land.

In addition to the Equipment, the property included in the saletransaction will include all rights, title, and interest to the trade name "Joe D. Hughes" and related marks and logos, documents, commercial and estimating processes, telephone numbers, customer history, computer hardware, and associated peripherals used in the operation of the Joe D. Hughes Business.

The principal terms of the Intermarine Agreement are:

Purchase Price Intermarine will pay KBR $16,620,000 for the Joe D. Hughes Property in cash at the Intermarine Closing.

Effective Date of The effective date of the Intermarine Agreement Agreement is the date that a fully executed counterpart of the Intermarine Agreement and a $200,000 earnest money deposit is received by the title company.

Closing The closing of the sale of the Joe D. Hughes Property will occur on the date no later than 20 days from the end of the Feasibility Period.

Employees Effective at the Intermarine Closing, Intermarine will hire on a permanent, full-time basis certain of the existing employees who are employed in the operation of the Joe D. Hughes Business.

Purchaser's Right of Intermarine has the limited right toTermination During terminate the Intermarine Agreement Feasibility Period pursuant to the terms of the Intermarine Agreement.

Mammoet Lease KBR agrees to assume and assign to Intermarine the Lease Agreement as of the Intermarine Closing.

Governing Law and The Intermarine Agreement will beDispute Resolution governed by and construed in accordance with the laws of the State of Texas. As an exclusive substitute for litigation, KBR and Intermarine agree to settle through a dispute resolution process set forth in the Intermarine Agreement, any dispute, controversy or claim which may arise between them concerning the Intermarine Agreement, the Joe D. Hughes Property, or the sale transaction.

Release Intermarine expressly agrees that KBR is selling the Joe D. Hughes Property in its strict "as is where is" condition. KBR makes no, and Intermarine expressly waives any, representations, warranties or guarantees, to Intermarine as to the quality or the condition, merchantability, suitability, or fitness of the Joe D. Hughes Property.

The North Shore Agreement

Pursuant to the North Shore Agreement, KBR has agreed to sell to North Shore the equipment, assets, and properties related to the operation of its pipe mill business located at 14035 Industrial Road, in Houston, Texas.

Specifically, KBR will sell to North Shore:

(1) a 23.5-acre tract of real property;

(2) all buildings and improvements on the Land and all fixtures attached to the buildings and improvements, together with all appurtenances to the Land, including any assignable right, title, and interest of KBR in access easements and adjacent waterways, streets, roads, alleys, or rights-of-way, and, to the extent they are severable as to only the Land or the Pipe Mill Business, existing plans, surveys, reports and studies, and licenses, permits and other intangible entitlements issued by the City of Houston, Harris County, the State of Texas or any agency, and utility service rights, permits, applications, and commitments;

(3) all of KBR's machinery, equipment, parts, tools, supplies, furniture and other unattached tangible personal property situated on the Land or in the buildings that are not in the receiving dock building and worth less than $1,000 individually, or that are not specified on the schedule to the North Shore Agreement;

(4) certain mobile assets;

(5) with the exception of materials that are proprietary, subject to confidentiality agreements with third parties, or subject to privilege, documents, commercial and estimating processes used in the Pipe Mill Business, telephone and facsimile numbers for the Pipe Mill Business, customer history records of the Green Bayou business, and records of the Pipe Mill Business;

(6) all assignable permits and licenses owned by KBR and related solely to the Green Bayou Property or the operation of the Pipe Mill Business; and

(7) any other assignable assets and property used solely in connection with the ownership, maintenance or operation of the Land or improvements or the operation of the Pipe Mill Business.

The principal terms of the North Shore Agreement are:

Consideration North Shore will deliver at the North Shore Closing in immediately available funds a purchase price of $7,600,000 to KBR, subject to any inventory adjustments, pro-ration of taxes, and other adjustments mutually agreed upon by KBR and North Shore, provided, however, that the purchase price will not be less than $7,100,000.

Closing The closing will occur within 75 days from the date of the North Shore Agreement.

Earnest Money Within two business days after the execution of the North Shore Agreement, North Shore will deliver to the title company $100,000 in immediately available funds. The North Shore Earnest Money will be fully refundable at North Shore's election for any reason and at any time during the Exclusivity Period -- the period commencing on the North Shore Effective Date and expiring on the 45th day after the North Shore Effective Date. The North Shore Earnest Money will become non-refundable if:

* following the Exclusivity Period, the North Shore Agreement terminates for any reason without a definitive agreement having been executed; or

* following the execution of the definitive agreement, the North Shore Closing fails to occur for any reason other than failure of the North Shore Closing to occur as a result of a breach of the definitive agreement by KBR, or as a result of any of the conditions specified in the paragraphs (a), (c), (d) or (e) of Section 1.17 of the North Shore Agreement not being satisfied.

Governing Law & The North Shore Agreement will beDispute Resolution governed by and construed in accordance with the laws of the State of Texas. As an exclusive substitute for litigation, KBR and North Shore agree to settle through a dispute resolution process set forth in the North Shore Agreement, any dispute, controversy or claim which may arise between them concerning the North Shore Agreement, the Pipe Mill Property, or the sale transaction.

Release North Shore expressly agrees that KBR is selling the Pipe Mill Property in its strict "as is where is" condition. KBR makes no, and North Shore expressly waives any, representations, warranties or guarantees, to North Shore as to the quality or the condition, merchantability, suitability or fitness of the Pipe Mill Property.

Arm's-Length Negotiations

Mr. Zanic assures the Court that the terms of the Intermarine Agreement and the North Shore Agreement were reached after extensive arm's-length negotiations between KBR and Intermarine and North Shore. The Intermarine Agreement and the North Shore Agreement were not the product of collusion and there is no insider affiliation between the Debtors and Intermarine and NorthShore.

The Debtors believe that the value received from selling the Joe D. Hughes Property and the Pipe Mill Property will be better used to grow their businesses in other areas that have a higher growth and better risk or reward allocation. Failure to enter into the Intermarine Agreement and the North Shore Agreement will materially, adversely, and irreparably impair any and all value that KBR currently has in those businesses, and may ultimately lead to their liquidation.

The Debtors note that Intermarine is well known to KBR since it is the single largest customer of the Joe D. Hughes Business and the Joe D. Hughes Business handles majority of Intermarine's overall business. Intermarine has played a very active role in the potential sale of the Joe D. Hughes Property from its early stages in November 2003 when it was close to being sold to another purchaser. Intermarine then actively participated in the bidding process for the Joe D. Hughes Property, and ultimately made the most financially attractive purchase offer.

Mr. Zanic tells the Court that Intermarine is a qualified buyer with sufficient availability of cash to consummate the Intermarine Agreement. In addition, Intermarine has agreed to hire at least 75% of the currently employed Joe D. Hughes employees. This serves as a significant benefit to KBR byensuring that it will no longer be obligated to pay employee benefits and severance to certain of its employees.

Mr. Zanic also points out that KBR has marketed the Pipe Mill Business for approximately one and a half years and during this entire time, there has only been one interested party that has made a legitimate offer to purchase the Pipe Mill Property. The marketing and sale process that was employed with respect to the sale of the Pipe Mill Property was consistent with the saleand marketing procedures related to the sale of the Joe D. Hughes Property. The pipe markets are a very mature, low-margin, and low-growth area. If KBR does not sell the Pipe Mill Property to North Shore, it is conceivable that KBR may not be able to sell the Pipe Mill Business at all, and will have to liquidate the business, selling all inventory and equipment on average of $.15 to $.40 for each dollar of such inventory and equipment. Thispotential liquidation price will be significantly less than the value of the business if it is sold as a going concern. In addition, in a liquidation scenario, KBR would be forced to terminate approximately 80 of its employees and may then be liable for a significant amount in severance to its employees.

Mr. Zanic contends that North Shore is a qualified buyer with sufficient cash available to consummate the North Shore Agreement and it has committed to finalizing the transaction with minimalinterruptions to the business. North Shore has also committed to hire at least 75% of the currently employed Greens Bayou employees.

Assumption and Assignment of Unexpired Lease

Mr. Zanic explains that the Intermarine Agreement requires KBR to assume and assign a certain lease obligation related to real property, which is currently leased by KBR to Mammoet USA, Inc., in accordance with the Lease Agreement, dated November 9, 2001. Pursuant to the Lease Agreement, KBR leases to Mammoet a storage facility that is used for the storage of Mammoet's heavy haul equipment.

KBR is not in default of any of its obligations under the Lease Agreement proposed to be assumed and assigned to Intermarine.The conveyance and assignment of the Lease Agreement to Intermarine, in and of itself, will provide each non-debtor contracting party with adequate assurance of the futureperformance under the Lease Agreement. Once the Lease Agreement is assigned, Intermarine will be able to perform all obligations under the Lease Agreement.

DOMAN INDUSTRIES: Supreme Court Approves Port Alice Mill Sale -------------------------------------------------------------Doman Industries Limited announced that the Supreme Court of British Columbia issued an order in connection with proceedings under the Companies Creditors' Arrangement Act, approving the sale of the Port Alice Mill to Port Alice Specialty Cellulose Inc., an affiliate of LaPointe Partners, Inc.

Under the purchase and sale agreement, the purchaser acquiressubstantially all of the Port Alice Mill assets including adjusted working capital valued at $2.73 million in consideration for one dollar and the assumption of outstanding obligations relating to the Mill, including employee and pension liabilities. All of the existing Port Alice employees will be offered employment by the purchaser as a condition of the transaction. The sale closed today.

A copy of the purchase and sale agreement may be obtained by accessing the Company's website at http://www.Domans.com/

About Doman

Doman is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia. Principal activities include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, value-added remanufacturing and producing dissolving sulphite pulp and NBSK pulp. All the Company's operations, employees and corporate facilities are located in the coastal region of British Columbia and its products are sold in 30 countries worldwide.

Pursuant to the Agreements, EESI and EESO provided Ocean Spray and certain of its affiliated entities with power, natural gas, energy project design and construction and bill payment services. As credit support for the Agreements, Enron Corporation issued a Guaranty Agreement, dated January 15, 1999, for Ocean Spray's benefit. On April 10, 2002, the Court authorized the Debtors to reject the Energy Alliance Agreement under Section 365 of the Bankruptcy Code.

Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP, in New York, reports that EESI and EESO have invoiced Ocean Spray around $5,400,000 for prepetition services rendered pursuant to the Agreements. Ocean Spray has filed proofs of claim for rejection damages against the Debtors aggregating about $8,900,000.

In their desire to amicably settle all matters between them, EESI, EESO and Ocean Spray entered into a Settlement Agreement on January 7, 2004. The salient terms of the Settlement Agreement provide for:

(a) a payment by Ocean Spray to EESO and EESI;

(b) Ocean Spray's withdrawal of all proofs of claim; and

(c) mutual releases by the parties of all claims, obligations and liabilities under the Agreements, including, without limitation, the Guaranty.

Ms. Gray asserts that the Settlement Agreement:

-- provides for a partial recovery to EESI and EESO based on their accounts receivable from Ocean Spray;

-- results in the final satisfaction of all claims between EESI, EESO and Ocean Spray related to the Agreements;

-- mitigates the risk that Ocean Spray would have a claim under the Plan of Reorganization, greater than EESI's and EESO's accounts receivable from Ocean Spray; and

-- mitigates the risk that Ocean Spray would be entitled to set off all of its rejection damages against the accounts receivable owed to EESI and EESO. (Enron Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., 215/945- 7000)

The CreditWatch placement follows ECCA's recent S-1 filing for an initial public offering of Income Units (IUs), representing shares of the company's class A common stock and senior subordinated notes due 2014. ECCA also plans to offer a separate issue of senior subordinated notes and to issue class B common stock. Concurrent with the offering, the company will enter into a new senior secured credit facility. ECCA expects to use proceeds from the proposed offering and new credit facility to repay about $107 million of bank loan debt, redeem $130 million of 9.125% subordinated notes and floating-rate notes, redeem preferred stock and accrued dividends of about $62 million, and repurchase shares of its common stock.

"Based on its preliminary review, Standard & Poor's believes that use of the IU structure by ECCA exhibits a more aggressive financial policy," explained Standard & Poor's credit analyst Ana Lai. "It also reduces the company's financial flexibility, as most of its cash flow will be used to pay debt service and a dividend on the new common shares. As such, the structure limits ECCA's ability to withstand potential operating challenges and also reduces the likelihood for future deleveraging."

Although the company's operating performance has been relatively stable, the intensely promotional and highly competitive nature of the optical industry could pressure operations given ECCA's small size relative to its main competitors, LensCrafters and Cole National. In addition, the debt portion of the IUs may not be treated as debt by the U.S. Internal Revenue Service (IRS) for federal income tax purposes. The inability to deduct interest on the subordinated notes may materially increase the company's taxable liability, making the income securities uneconomic.

ECCA is the third-largest optical retail chain in the U.S. as measured by net revenues, operating 360 stores primarily in the superstore format. Standard & Poor's will meet with management to discuss the financial and business impact of the proposed transaction prior to resolving the CreditWatch listing.

FACTORY 2 U STORES: Couchman Entities Disclose 6.6% Equity Stake----------------------------------------------------------------Couchman Partners, L.P., Couchman Capital LLC, and Jonathan Couchman beneficially own 1,192,200 shares of the common stock of Factory 2 U Stores, Inc., representing 6.6% of the common stock of the Company. 6.6% is based on 17,946,882 shares of common stock outstanding as of December 12, 2003 as reported in the Company's financial statements filed with the Securities and Exchange Commission on December 16, 2003.

The Couchman Entities have sole power to vote or dispose of the 1,192,200 shares, however the shares are held directly by Couchman Partners, L.P. Because Jonathan Couchman is the sole member of the Management Board of Couchman Capital LLC, which in turn is the general partner of Couchman Partners L.P., these entities may be deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended, to be the beneficial owners of all shares of common stock of Factory 2 U Stores held by Couchman Partners, L.P.

The principal business address of Couchman Partners, L.P., is c/o Hedge Fund Services (BVI) Limited, James Frett Building, PO Box 761, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. The principal business address of Couchman Capital LLC and Mr. Couchman is 800 Third Avenue, 31st Floor, New York, New York 10022. Couchman Partners, L.P., is a British Virgin Islands limited partnership. Couchman Capital LLC, is a Delaware limited liability company. Jonathan Couchman is a citizen of the United States of America.

About Factory 2-U Stores, Inc.

Headquartered in San Diego, California, Factory 2-U Stores, Inc.-- http://www.factory2-u.com/-- operates a chain of off-price retail apparel and housewares stores in 10 states, mostly in thewestern and southwestern US, sells branded casual apparel for thefamily, as well as selected domestics, footwear, and toys andhousehold merchandise. The Company filed for chapter 11 protectionon January 13, 2004 (Bankr. Del. Case No. 04-10111). M. BlakeCleary, Esq., and Robert S. Brady, Esq., at Young Conaway Stargatt& Taylor, LLP represent the Debtors in their restructuringefforts. When the Debtors filed for protection from theircreditors, they listed $136,485,000 in total assets and$73,536,000 in total debts.

(c) the scope and form of mailed and publication notice of the Debtors' reorganization proceedings; and

(d) a Voting Record Date.

The Voting Procedures

A. Asbestos Personal Injury Claims

(a) Notice to and Voting by Attorneys for Asbestos Personal Injury Claims in the United States

Some 365,000 Asbestos Personal Injury Claims had been asserted against the Debtors as of the Petition Date in the United States. Although no bar date for the filing of Asbestos Personal Injury Claims was established in these proceedings, the Debtors intend to ask the Court to allow the claims temporarily for voting Purposes.

The Debtors do not have mailing addresses for many known individual holders of Asbestos Personal Injury Claims in the U.S. Prior to the Petition Date, the Debtors' asbestos claims were historically processed by the Debtors' insurers and by the Center for Claims Resolution, which maintained the data by name and address of counsel for a given claimant, rather than for the claimant themselves.

Thus, the Debtors propose:

-- to provide Solicitation Packages to attorneys for holders of Asbestos Personal Injury Claims in the United States rather than providing Solicitation Packages to the claimants themselves;

-- that the attorneys will also vote on the Plan with respect to the Asbestos Personal Injury Claims to the extent the attorneys have the authority to do so;

-- that individual holders of Asbestos Personal Injury Claims will have the ability to request a Solicitation Package directly from the Voting Agent or, in the alternative, be entitled to vote their claims themselves and either return their Ballot directly to the Voting Agent or transmit their votes to their attorneys for inclusion on a Master Ballot that the attorney will then return to the Voting Agent; and

-- that Individual holders of Asbestos Personal Injury Claims in the United States will also have the ability to vote their claims directly in the event their attorney lacks or is otherwise unable to certify that he or she has the authority to vote or grant a proxy for voting on the Plan on behalf of the claimant in question.

The Voting Agent will cause a Solicitation Package to be mailed directly to individuals in accordance with the Voting Procedures, if:

-- proof of an Asbestos Personal Injury Claim has been signed and filed by an individual prior to the Voting Record Date; or

-- an attorney timely advised the Voting Agent of the names and addresses of individuals who should receive their own Solicitation Packages.

(b) Notice to Known Holders of Asbestos Personal Injury Claims in the United Kingdom

About 1,000 other Asbestos Personal Injury Claims had been asserted against Debtor T&N Limited and certain of its subsidiaries in the United Kingdom as of the Petition Date, together with certain other claims arising from countries other than the United States and the United Kingdom.

As with Asbestos Personal Injury Claims asserted by claimants in the United States, the Debtors will ask the Court to allow Asbestos Personal Injury Claims asserted by claimants in the United Kingdom temporarily for voting purposes. Unlike in the United States, however, the Debtors' records contain names and addresses for all known holders of Asbestos Personal Injury Claims against the Debtors.

Accordingly, the Debtors will cause a Solicitation Package to be mailed to all holders of Asbestos Personal Injury Claims in the United Kingdom directly.

Most of the individual Asbestos Personal Injury Claims asserted against the Debtors have not been assigned values in either the Debtors' Chapter 11 cases or administration proceedings in the United Kingdom. In particular, there has been no requirement for proofs of claim on account of Asbestos Personal Injury Claims to be filed in either these Chapter 11 cases or in the U.K. Debtors' administration proceedings.

Instead, individual Asbestos Personal Injury Claims will be assigned values according to the Asbestos Personal Injury Trust Distribution Procedures filed with the Plan.

The value assigned by the TDP to an Asbestos Personal Injury Claim is based on two separate criteria:

* The claims listing in the relevant tort system of the Debtor against whom an Asbestos Personal Injury Claim is asserted; and

* The Disease Level of the Claim.

The instructions accompanying the Ballots and Master Ballots to be used in voting on the Plan will provides for the values to be ascribed to Asbestos Personal Injury Claims based on these criteria. In the case of Asbestos Personal Injury Claims to which a value is not ascribed by the TDP, claims against the Insured PI Trust Funds will utilize the matrix values established for T&N/U.S. Claims, while T&N/ROW claims will each be ascribed a value of $1 for voting purposes only.

All values assigned to Asbestos Personal Injury Claims by the Voting Procedures are to be used solely for voting purposes.

No vote on the Plan by or on behalf of a holder of an Asbestos Personal Injury Claim will be counted by the Voting Agent unless the Ballot or Master Ballot reflecting the vote is submitted to the Voting Agent with written certifications. The certifications will be under penalty of perjury for United States claimants that:

-- the holder of the Asbestos Personal Injury Claim has experienced exposure to an asbestos-containing material or product with respect to which the relevant Federal-Mogul entity has legal liability; and

-- the holder of the Asbestos Personal Injury Claim has the Disease Level asserted on the holder's Ballot or Master Ballot, based on medical records or similar documentation in the possession of the parties specified on the ballot.

In the case of United States claimants whose claims are voted by their attorney, the attorney must certify which will be under penalty of perjury pursuant to Section 1746 of the Judiciary and Judicial Procedures Code, that he or she has the authority to:

-- cast a Ballot on the Plan on behalf of the holders of each of the Asbestos Personal Injury Claims listed on a Master Ballot; and

-- represent the disease category indicated with respect to each holder of an Asbestos Personal Injury Claim listed on the Master Ballot, which disease category is true and correct.

If an attorney cannot make these certifications, the attorney is required to send to the Voting Agent, within 30 days after the mailing of the Solicitation Package, a list of the names and addresses of claimants on whose behalf the attorney is not entitled to vote, in which case individual Solicitation Packages will be sent to the claimants.

B. Claims by Holders of Debt Securities

Federal-Mogul Corporation issued several Notes in addition to a single issue of Convertible Subordinated Debentures. The Notes are guaranteed by certain of the other Debtors and are secured by the stock held by Federal-Mogul in certain of its United States subsidiaries. Many of the Notes are not held directly by the beneficial owners, but are in instead held in "street name" by various financial institutions that hold the Notes on the beneficial owners' behalf.

Therefore, the Voting Procedures contain customary procedures for the distribution of Solicitation Packages to Debt Nominees and provide for either the "prevalidation" of individual Ballots or the compilation of Master Ballots by the Debt Nominees. Prevalidated Ballots will be returned directly to the Voting Agent. If Prevalidated Ballots are not used, individual Ballots will be summarized on a Master Ballot and then returned to the Voting Agent.

Absent an affirmative election to the contrary, the holders of Convertible Subordinated Debentures will be deemed to convert their Convertible Subordinated Debentures to Federal-Mogul Corporation Common Stock, which will allow them to receive Warrants under the Plan to purchase common stock in Reorganized Federal-Mogul Corporation. The instructions to the Ballots and Master Ballots for the Convertible Subordinated Debentures will explain this deemed conversion, and the Ballots and Master Ballots themselves will provide the holders of Convertible Subordinated Debentures to affirmatively opt out of the conversion.

D. Equity Interests

The holders of certain preferred and common equity interests in Federal-Mogul Corporation are entitled to vote on the Plan. As of the Voting Record Date, holders of Equity Interests in Federal-Mogul Corporation will receive a Solicitation Package and a Ballot.

Many of the Equity Interests are not held directly by the beneficial owners, but are instead held in "street name" by various financial institutions that hold the Equity Interests on behalf of the beneficial owners. The Voting Procedures contain customary procedures for the distribution of Solicitation Packages to Equity Nominees and provide for either the prevalidation of individual Ballots or the compilation of Master Ballots by the Equity Nominees. Prevalidated will be returned directly to the Voting Agent. If prevalidated ballots are not used, individual Ballots will be summarized on a Master Ballot and then returned to the Voting Agent.

E. The Voting Agent

The Voting Agent will assist the Debtors in the distribution of Solicitation Packages and the tabulation of votes and proxies on the Plan. The Voting Agent will be the principal initial contact for the holders of Claims and Equity Interests for inquiries on the Plan and the Voting Procedures, both through the telephone helplines to be established under the Voting Procedures and at the Federal-Mogul Reorganization Web site at http://fmoplan.com

F. Aggregation of Multiple Unsecured Claims

For purposes of voting, classification, and treatment under the Plan, each entity that holds or has filed more than one Unsecured Claim against any particular Debtor will be treated as if the entity has only one Unsecured Claim against the Debtor, and the Unsecured Claims filed by the entity will be aggregated and the total dollar amount of the entity's Unsecured Claims against a given Debtor will be the sum of the aggregated Unsecured Claims asserted by the entity against the Debtor.

For purposes of voting, classification and treatment under the Plan other than with respect to Debt Securities, the number and amount of Unsecured Claims held by an entity to which any Unsecured Claim is transferred and which transfer is effective pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure no later than the close of business on the Voting Record Date will be determined based on the identity of the original holder of the Unsecured Claim and whether any Unsecured Claims held by the entity entitled to vote as of the Voting Record Date would be aggregated pursuant to Section VI(c)(i) of the Voting Procedures if they were held by the original owner as of the Voting Record Date.

Bank Claims, Surety Claims and Noteholders Claims are placed into classes under the Plan with respect to both Debtor Federal-Mogul Corporation and certain of its direct and indirect subsidiaries. This classification reflects the fact that the subsidiaries guaranteed or pledged assets to secure the repayment of the obligations giving rise to the Claims. The Ballots for these Claims will provide that, as a default, the claimants will vote to accept or reject the Plans of all of the Debtors against whom they have Claims.

However, in the event that the holder of the Claims wish to accept the Plan as it applies to certain of the Debtors and reject the Plan as it applies to others, the Ballots will provide that the claimholder may affirmatively elect the option.

H. Pending Objections

Claimholders that are the subject of pending objections as of the Voting Record Date are not entitled to vote on the Plan unless the Bankruptcy Court allows their claims by the Voting Deadline.

I. Claimants' Voting Motion

Any claim holder that is not entitled to vote because its Claim is the subject of an objection pending before the Bankruptcy Court, or is entitled to vote but seeks to challenge the amount of the allowed amount of the Claim for voting purposes, may file a Claimants' Voting Motion. A Claimant's Voting Motion must be filed within 30 calendar days after the later of the:

-- notice of the Confirmation Hearing and Creditors' Meetings are mailed; and

-- service of the notice of an objection to the Claim.

J. Vote on Request to Summon Creditors' Meetings and Resolutions to be Proposed in Connection with U.K. Administration Proceedings

Holders of Claims against the U.K. Debtors will utilize their Ballots to vote in favor of or against certain matters in the U.K. Debtors' administration proceedings in the United Kingdom.

Proposed Solicitation and Notice Procedures

1. Contents of the Solicitation Packages

The Voting Agent will solicit acceptances of the Plan by distributing the Plan, Disclosure Statement and related materials to a broad range of creditors and equity security holders asserting claims against and holding interests in the Debtors. The solicitation materials to be distributed to the creditors and interest holders will include:

(a) notice of the Confirmation Hearing and the time fixed for submitting votes accepting or rejecting the Plan and the time fixed for filing objections to confirmation of the Plan;

(b) the order approving the Debtors' Disclosure Statement with respect to the Plan;

(c) the Disclosure Statement;

(d) solely for holders of claims and interests in classes entitled to vote on the Plan, appropriate Ballots and voting instructions;

(e) solely for entities entitled to vote on the Plan, pre-addressed, postage-paid return envelopes for Ballots and Master Ballots; and

(f) any other materials ordered by the Bankruptcy Court to be included as part of the Solicitation Package.

2. Notification Program for the Plan

The Debtors developed a comprehensive notice program intended to provide notice of the Plan to both known and unknown claimants and holders of interests. The Notification Program are divided into discrete components:

I. Direct mailed notice to known creditors of both the U.S. and the U.K. Debtors, to parties listed on the Debtors' Schedules of Assets and Liabilities as counterparties to executory contracts or unexpired leases, and to 38,000 current and former employees of the U.K. Debtors;

II. Published notice of the Debtors' reorganization proceedings in newspapers and magazines in the United States, United Kingdom, and 121 other countries where the Debtors may have conducted asbestos-related business activities. Published notice also will appear in international editions of multi-country publications like Time and the International Herald Tribune.

The Publication Notice Program may be divided into Subprograms:

* The U.S. publication notice, which is targeted to reach both asbestos-related and non-asbestos-related claimants in the U.S.;

* Two separate notices of the Plan in the U.K.:

-- The first notice will be targeted at non- asbestos-related creditors and will be placed in The Financial Times, The Daily Telegraph, and The Sunday Times; and

-- The second notice will be targeted at potential asbestos-related claimants and will be placed in six publications of national circulation in the United Kingdom as well as 16 local publications; and

* Program of published notice in 121 countries around the world in which the Debtors believe that Debtor T&N Limited and its subsidiaries and associated companies may have conducted asbestos-related activities.

The Debtors' records do not permit a definitive determination of every location in which an asbestos-containing product of the Debtors may have been applied or to which an asbestos-containing product of the Debtors may have been shipped. Accordingly, the Debtors relied on three principal sources in determining where exposure to asbestos may have resulted from one of the Debtors' products:

(1) the location of T&N's non-U.K. subsidiaries and associated companies;

(3) references to asbestos-related business activities in a given country contained in T&N's historical documents archive.

The Debtors propose a four-tiered system of publication notice in countries other than the United Kingdom and the United States:

(a) Tier I

Countries in which T&N had an overseas subsidiary and associated company. In all countries except Nigeria, T&N and its subsidiaries granted SLA license or licenses to one or more parties. Tier I consists of 24 countries. The Debtors will cause notice to be placed in two national or large circulation publications per country, plus one publication in each city identified as having a subsidiary or associated company or an SLA licensee located therein.

(b) Tier II

Countries in which T&N and its subsidiaries granted an SLA license or licenses to one or more parties but did not have a subsidiary or associated company. Tier II consists of 51 countries. The Debtors will cause notice to be placed in one national or large circulation publications per country, plus one publication in each city identified as having an SLA licensee located therein.

(c) Tier III

Countries in which the search of records sampled from T&N's electronic archive database yielded some evidence of asbestos-related activities, but T&N had no subsidiary or associated company in the country and a review of the records sampled as part of the search did not demonstrate that an SLA license was granted to a party in that country. Tier III consists of 46 countries. The Debtors will cause notice to be placed in one national or large circulation publication per country.

(d) Tier IV

Countries in which no subsidiary, associated company or SLA License was present and a review of the records sampled indicated that no T&N asbestos-related activities occurred in the country. Tier 4 consists of six countries. Potential claimants in Tier IV countries will receive notice of the Plan solely through placement of the notices in the international publications.

III. Various additional means of outreach, like Internet banner advertising and a press release. Other mechanisms intended to further the effectiveness of the notices include an informational Web site on the Internet at http://www.fmoplan.comand telephone helplines in both the United States and the United Kingdom. The Web site and telephone helplines will be prominently featured in the mailed and publication notices.

Forms of Ballots and Master Ballots

The forms of Ballot and Master Ballot are tailored to address the particular aspects of the Debtors' reorganization proceedings and to include certain relevant and appropriate information for each class of Claims.

A. Claims Against Multiple Debtors

The holder of a single claim against multiple Debtors may affirmatively opt to accept the Plan as it pertains to certain of the Debtors and reject the Plan as it pertains to others of the Debtors by so indicating on its Ballot and attaching a separate sheet to the Ballot allocating its votes on the Plan.

B. Forms of Ballot for Asbestos Personal Injury Claims

The Asbestos Ballots request information from holders of Asbestos Personal Injury Claims sufficient to allow the Debtors to classify the claims properly, as to the claimant's Disease Level and the Debtor or Debtors against whom their Asbestos Personal Injury Claims are asserted. The Asbestos Ballots also enable those holders of Asbestos Personal Injury Claims who assert claims against one or more of the U.K. Debtors, to vote on certain matters in connection with the U.K. Debtors' administration proceedings.

C. Votes by Holders of Claims against the U.K. Debtors on Certain Matters in Connection with the U.K. Debtors' Administration Proceedings

Holders of Claims against the U.K. Debtors will also vote on whether to demand that the Administrators summon meetings of the creditors of the U.K. Debtors pursuant to Section 17(3) of the U.K. Insolvency Act 1986 for the purposes of considering and voting on these resolutions:

(a) that the Administrators:

-- propose Schemes of Arrangement or Voluntary Arrangements and take all necessary steps to summon meetings of creditors and members to consider and vote on the Schemes; or

-- apply to the U.K. Court for discharge of the U.K. administration orders and give the Plan Proponents 14 days' notice of the application; and

(b) that the expenses of summoning and holding any of the meetings of creditors are to be payable out of the estates of the U.K. Debtors as an expense of the administration proceedings.

The holders of claims against the U.K. Debtors will also vote on whether to appoint individuals to be the agent and proxy holder of the claimholders at the meetings of creditors, or at any adjournment of those meetings, to vote in favor of the Resolutions or any modifications of the Resolutions that the agent and proxy holder deems appropriate. As part of the solicitation process, the Plan Proponents will also be authorized, as agents of the Claimholders voting in favor of making the Demand, to take all steps that the Plan Proponents consider necessary or desirable to facilitate the Marketing Procedures described in the Plan, including issuing proceedings and making applications to the U.K. Court.

The votes with respect to the Demand, the Resolutions and the certain other matters are being taken because the Administrators have not agreed to recommend Schemes of Arrangement and Voluntary Arrangements that parallel the Plan. The Plan Proponents are working toward an agreement with the Administrators to recommend parallel Schemes of Arrangement and Voluntary Arrangements. In case negotiations do not result in a consensual resolution with the Administrators, the Plan Proponents will, contemporaneously with soliciting votes on the Plan and conducting negotiations with the Administrators, solicit proxies relating to the Demand, the Resolutions and the related items.

The Debtors believe that seeking the approval of the creditors of the U.K. Debtors for the Demand, Resolutions and related matters contemporaneously with soliciting votes on the Plan both promotes administrative efficiency in the Debtors' reorganization proceedings and reflects the reality of both the U.S. and U.K. proceedings.

D. Compliance with Federal Rule of Bankruptcy Procedure

Rule 3017(d) of the Federal Rules of Bankruptcy Procedure requires the Debtors to mail a form of ballot, which substantially conforms to Official Form No. 14, to "creditors and equity security holders entitled to vote on the plan." The Debtors believe that that the forms of Ballots and Master Ballots comport sufficiently with Official Form No. 14 to be used in these proceedings.

Voting Record Date

The Debtors ask the Court to set the date that is five days after the entry of the order approving the Disclosure Statement as the record date for purposes of determining creditors entitled to vote or, in the case of non-voting classes, to receive the Solicitation Package. With respect to transfers of Claims, the deadline for transfer objection must have passed as of the Record Date in order for the transferee to be considered the holder of the Claim entitled to vote on the Claim or otherwise receive a Solicitation Package.

According to James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in Wilmington, Delaware, the proposed Voting Procedures, forms of Ballots and Master Ballots and proposed notice procedures afford claimants with a full and fair opportunity to approve or reject the Plan.

The voting procedures proposed for Asbestos Personal Injury Claims are comparable to those established in substantially all asbestos-related Chapter 11 reorganizations. The Asbestos Voting Procedures embody an efficient and well-established process for allowing the holders of Asbestos Personal Injury Claims the opportunity to vote on the Plan.

Mr. O'Neill notes that if any creditor seeks to challenge the objection to its Claim for voting purposes, the creditor must file with the Court a motion temporarily allowing the claim in a different amount on or before the 30th day after the later of:

(a) mailing of the notice of the Confirmation Hearing and Creditors' Meetings; and

(b) service of a notice of an objection, if any, to the Claim.

The Debtors further propose that as to any creditor filing the Motion, the creditor's Ballot should not be counted unless temporarily allowed by the Court for voting purposes, after notice and a hearing.

Mr. O'Neill says that the proposed Voting Procedures embody an orderly and logical method for soliciting and tabulating the Ballots of those parties entitled to vote on the Plan.

A free copy of the instructions for completing ballot for the Second Amended Plan is available at:

The securities will be guaranteed by FelCor Lodging Trust Inc. and FelCor Lodging L.P.'s domestic subsidiaries, and will be privately placed under Rule 144A. FelCor Lodging L.P. is a limited partnership, whose sole general partner and 95% owner is FelCor Lodging Trust Inc. Combined with a portion of the cash on hand and a $200 million draw down from FelCor Lodging Trust's secured debt facility, proceeds will be used to redeem the $175 million 7.375% senior notes due 2004 and to tender for $475 million of the $573 million currently outstanding 9.5% senior notes due 2008. During April, FelCor purchased in the open market approximately $26 million of the 9.5% senior notes due 2008.

At the same time, Standard & Poor's affirmed its 'B-' senior unsecured debt rating on FelCor Lodging L.P. and its ratings on FelCor Lodging Trust, including the 'B' corporate credit rating. The outlook is stable. Approximately $1.9 billion in consolidated debt was outstanding at March 31, 2004, on a pro forma basis.

Pro forma for the planned debt transaction, operating lease adjusted debt to EBITDA was 8.5x for the 12 months ended March 31, 2004. "While this measure is weak for the rating, the anticipated lodging industry growth and asset sales should allow FelCor's credit measures to strengthen in 2004 and 2005," said Standard & Poor's credit analyst Sherry Cai. In May, the company raised its 2004 RevPAR growth guidance to 4%-5%, driven primarily by an expected recovery in business travel. Standard & Poor's expects that FelCor's debt to EBITDA measure to remain above 6x through about the end of 2005.

Pioneer is in the business of publishing a daily newspaper, and was a party with Rainbow to an annual revenue volume contract. This agreement provided a discounted pricing structure for Rainbow on the condition that Rainbow purchase at least $2.5 million of advertising annually from Pioneer and its affiliated entities. The term of this agreement was from February 2, 2003, through February 2, 2004.

Karen C. Bifferato, Esq., at Connolly Bove Lodge & Hutz LLP in Wilmington, Delaware, reports that Rainbow has sold all of the grocery stores within the markets served by Pioneer's publications and is no longer performing under the agreement. The Sale Order did not authorize the Debtors to assume and assign the Pioneer/Rainbow agreement.

Under the terms of the agreement, if Rainbow fails to purchase $2.5 million in advertising during the one-year term, Rainbow will be retroactively billed at a higher rate to be determined from Pioneer's 2002 Retail Advertising Rate Card. The bill is calculated applying the Short Rate to all of the advertising placed during the term of the contract, and Rainbow is to pay the amount necessary to make up the difference between the Short Rate total and the amount already paid for the advertising at the lower rate.

Since Rainbow has not and cannot meet the revenue commitment required to qualify for discounted advertising rates, Rainbow owes Pioneer the difference.

Debtors Respond

The Fleming Companies Debtors believe that they have paid for and are current as to any postpetition amounts billed by Pioneer for postpetition advertising services under the prepetition agreement. According to Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub PC in Wilmington, Delaware, those billed amounts were based on the volume discount rate available under the agreement. The Debtors are still in the process of reconciling a bill for $39,000, which they will promptly pay on final review and verification of the calculations.

As of this date, the Debtors have not assumed or rejected the agreement, but are in the process of reviewing this executory contract and will act "in due course." In all events, Pioneer is not suffering any prejudice pending that determination.

Pioneer's administrative claim arises not from a postpetition transaction, but from a prepetition contract that has not been assumed by the Debtors. There is no postpetition contract or agreement between Pioneer and the estates capable of forming the basis for an administrative claim. When the Debtors make their decision, Pioneer will either have a right to cure of the defaults under the prepetition agreement, or to file a general, unsecured claim -- which may, in turn, be objected to by the Debtors.

In the meantime, Pioneer's claim should be limited to what is reasonable for the advertising actually used, and the prepetition agreement is inapplicable. The Debtors tell the Court that Pioneer's request is premature at this time and should be denied.

The Official Committee of Unsecured Creditors agrees with the Debtors and urges the Court to deny Pioneer's request.

Lenders Object

Deutsche Bank Trust Company Americas, as Administrative Agent, and JPMorgan Chase Bank, as Collateral Agent, Provider of Treasury Services, and Syndication Agent, on behalf of themselves and the other secured lenders, assert that there is no availability under the DIP Facility and all outstanding postpetition letters of credit for these payments. Dennis Melor, Esq., at Greenberg Traurig LLP in Wilmington, Delaware, contends that the debt should not be paid until the Lenders are first paid in full.

Pioneer Insists

Ms. Bifferato tells the Court that the term of the agreement has expired by its own terms, and contrary to the vague wording in the Debtors' response, Rainbow did not place the requisite $2.5 million of advertising during the contract term. Furthermore, now that the Plan is filed the objections to Pioneer's request are "largely moot."

The Lenders object only to timing, asking that payment be delayed until the effective date of a Plan. Given that a Plan is now in prospect, Pioneer withdraws its request for immediate payment of its claim.

As to the Debtors' response, now that the agreement has expired by its own terms, there is no longer an agreement to assume so in effect the decision is made. This failure by the Debtors to assume or reject the agreement postpetition before its expiration does not deprive Pioneer of its administrative claim. The Debtors are required to satisfy contractual obligations that arise postpetition, and those obligations are administrative claims.

Pioneer calculates its administrative claim at $459,473.95 -- the difference between the discount rate and the short rate for advertising placed by the Debtors after the Petition Date. The practice of the industry and the Debtors' prepetition conduct set the value of the claim, intending by that to encourage vendors to deal with a postpetition debtor by providing fair treatment to those vendors and satisfying their legitimate expectations for payment. Contrary to the Debtors' suggestion of a limitation to what is reasonable, contractual terms are the best indicator of the actual value of goods and services provided postpetition.

HEARTLAND PORK: Court Extends CCAA Protection to June 30, 2004 --------------------------------------------------------------The Saskatchewan Court of Queen's Bench continued the stay of proceedings with respect to Heartland Pork Management Services and seven related hog operations. The stay was granted to extend the protection offered under the Companies' Creditors Arrangement Act to June 30, 2004 to ensure the businesses can continue to operate as usual.

The judge adjourned Sterling Pork Farm's application to purchase substantially all of the assets of those operations pending further consideration by the court.

Saskatchewan Wheat Pool, the majority shareholder in these operations has been providing interim financing to the hog operations through the court protection process.

Headquartered in Regina, Saskatchewan, Saskatchewan Wheat Pool is a publicly traded agribusiness co-operative. Anchored by a prairie-wide grain handling and agri-products marketing network, the Pool channels prairie production to end-use markets in North America and around the world. These operations are complemented by value-added businesses and strategic alliances, which allow the Pool to leverage its pivotal position between prairie farmers and destination customers.

HOLLINGER INTERNATIONAL: Reaches Settlement With Peter Y. Atkinson ------------------------------------------------------------------Hollinger International Inc. (NYSE: HLR)announced that it has reached a settlement agreement with a former director and officer of the Company, Peter Y. Atkinson. The terms of the settlement are subject to approval by the Delaware Chancery Court in theDecember 2003 derivative action brought by Cardinal Value Equity Partners, LP, because Mr. Atkinson is a defendant in that action.

Under the settlement, the Company has received from Mr. Atkinsonapproximately $2.8 million ($350,000 of which Mr. Atkinson paid in November and December 2003), which represents 100% of the amounts he received, plus interest, in payments (i) previously characterized as "non-compete" payments, and (ii) under the Company's "Hollinger Digital Management Incentive Plan." The Company is holding these funds in an escrow account pending a future application to the Delaware Chancery Court to approve the terms of the settlement.

Mr. Atkinson, who had previously resigned as a director of Hollinger International, has also resigned from his remaining role as an Executive Vice President of the Company. He will continue as a consultant to the Company, assisting primarily on issues relating to its ongoing post-closing adjustment dispute with CanWest. As a result of this settlement, Mr. Atkinson was notnamed as a defendant in the amended complaint filed last Friday, May 7, 2004 in the U.S. District Court for the Northern District of Illinois.

Hollinger International Inc. is a global newspaper publisher with English-language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator magazine in Great Britain, the Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets.

As reported in the Troubled Company Reporter's March 17, 2004 edition, Hollinger International Inc. (NYSE: HLR) announced that primarily as a result of the ongoing investigation being conducted by the Special Committee of the Company's Board of Directors, as well as the disruption of management services provided to the Company arising from its ongoing dispute with Ravelston Corporation Limited, the Company is not able to complete its financial reporting process and its audited financial statements for inclusion in the Annual Report on Form 10-K for fiscal year 2003 by the filing deadline. The Company intends to complete its financial reporting process as soon as practicable after thecompletion of the investigation by the Special Committee, and then promptly file the 10-K.

The company's September 30, 2003, balance sheet shows a working capital deficit of about $293 million.

The ratings of the class A and class B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class C notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date.

Independence I is a collateralized debt obligation (CDO) managed by Declaration Management & Research LLC that closed December 18, 2000. Independence I is composed of approximately 24.1% RMBS, 21.9% CMBS, 47.5% ABS and 6.5% CDOs. Included in this review, Fitch Ratings discussed the current state of the portfolio with the asset manager. The transaction's reinvestment period has ended and the manager's sales are limited to defaulted assets and equity.

Since Fitch's rating action July 17, 2003, collateral of $21.2 million (7.1%) has been downgraded to or below 'CCC+'. Total collateral rated equal to or below 'CCC+' is $30.3 million (10.2%). Assets rated 'BB+' or lower represented approximately 13.45% as of June 26, 2003, and increased to 22.35% as of the trustee report dated March 26, 2004. The weighted average rating factor has also deteriorated from 20 (BBB-) to 28 (BBB-/BB+).

The class A/B overcollateralization ratio and class C overcollateralization ratio have decreased from 109.64% and 103.94%, respectively as of June 26, 2003 to 107.28% and 101.7% as of the most recent trustee report. Both overcollateralization ratios continue to pass their trigger levels.

As a result of this analysis, Fitch has determined that the current ratings assigned to the class A, B, and C notes no longer reflect the current risk to noteholders.

ISLE OF CAPRI: Issues Statement on Move to Revoke Gaming License----------------------------------------------------------------In response to announcements made at Chicago Attorney General Lisa Madigan's press conference Tuesday, Timothy M. Hinkley, president and COO of Isle of Capri Casinos, Inc. (Nasdaq: ISLE), has issued the following statement:

"We are greatly disappointed, but we are not surprised, by Attorney General Lisa Madigan's announcement to resume hearings to revoke the 10th license. We also take great issue with her mischaracterizations of our company and the people who run our company.

Throughout this process, the Isle of Capri Casinos has been open and cooperative with the Illinois Gaming Board and its staff; we played by the rules and we believe the process, created by Madigan, was fair and open.

We strongly believe that Madigan's action is not in the best interest of the people of Illinois. In the announcement, the AG did not provide any new information; instead this process has become a game of political one-up- man-ship.

We will continue to pursue the necessary approvals to develop our project, including the approval of the bankruptcy court and the Illinois Gaming Board."

Isle of Capri Casinos, Inc., a leading developer and owner of gaming and entertainment facilities, operates 16 casinos in 14 locations. The company owns and operates riverboat and dockside casinos in Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and Lake Charles (2 riverboats), Louisiana; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Missouri. The company also owns a 57 percent interest in and operates land-based casinos in Black Hawk (two casinos) and Cripple Creek, Colorado. Isle of Capri's international gaming interests include a casino that it operates in Freeport, Grand Bahama, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. The company also owns and operates Pompano Park Harness Racing Track in Pompano Beach, Florida.

* * *

As reported in the Troubled Company Reporter's March 18, 2004, Edition, Standard & Poor's Ratings Services revised its outlook on Isle of Capri Casinos, Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB-' corporate credit rating.

The outlook revision follows Isle's announcement that the company has been selected by the Illinois Gaming Board as the successful bidder for the 10th Illinois gaming license. The company bid $518 million for the license. Subject to final approval by the Illinois Gaming Board and Bankruptcy Court approval, Isle intends to construct a $150 million casino in Rosemont, which will include 40,000 square feet of gaming space and 1,200 gaming positions, with expected completion to occur eight months after construction commences. Given initial capital spending plans, increased debt associated with the Illinois project, and pro forma for Standard & Poor's estimate of cash flow for the Rosemont property's first full year of operation, debt to EBITDA, adjusted for operating leases, will be between 5.0x and 5.5x by the company's fiscal year end in April 2005. The company has not yet disclosed its plans for financing the cost of the license and the new casino.

"The ratings reflect Isle's aggressive growth strategy, the second-tier market position of many of its properties, and increased expansion capital spending," said Standard & Poor's credit analyst Peggy Hwan. "These factors are offset by the company's diverse portfolio of casino assets, relatively steady historical operating performance, and credit measures that have historically been maintained in line with the rating."

KB TOYS: Sells Internet Assets to Toy Acquisition for $7.4MM+ -------------------------------------------------------------KB Toys, Inc. announced that as part of its continued restructuring efforts it has completed the sale to Toy Acquisition Corp. of substantially all of its assets relating to the KB Toys retail Internet operations. KB Toys also licensed various trademarks and domain names to Toy Acquisition Corp., which will operate the http://www.KBtoys.com/Web site under the license agreement. KB Toys will now focus on its core retail store and wholesale operations.

The sale includes inventory, operational systems, certain intellectual property and transfer of the leases for a fulfillment center located in Blairs, Virginia and the Internet company headquarters located in Denver, Colorado. Toy Acquisition Corp., which will be re-named eToys Direct, Inc., will operate in the Blairs facility and will maintain its corporate headquarters in Denver. Both KB Toys and eToys Direct will participate in select joint marketing efforts going forward. KB Toys will assist in the transition effective immediately.

"The sale of the Internet assets and licensing the http://www.KBtoys.comretail site are significant reorganization steps planned as part of KB Toys' restructuring process. The Company now may focus on its core competencies of toy retailing and wholesaling," said Michael L. Glazer, chief executive officer of KB Toys, Inc. "These transactions further reduce operating expenses and improve our financial position. We can now devote our efforts to positioning KB Toys stores for long-term success. We're pleased that these arrangements allow our stores to continue to benefit from online branding and that our customers will continue to benefit from a KB Toys online retail presence."

The sale price includes approximately $7.4 million in cash plus a minimum royalty payment to KB Toys, Inc. of $500,000 per year for the next three years. In addition, a wholly owned subsidiary of D. E. Shaw Laminar Portfolios has agreed to provide a $20 million line of credit to eToys Direct. The acquisition was approved by Judge Joel B. Rosenthal of the U.S. Bankruptcy Court, District of Delaware on April 29, 2004.

eToys Direct, Inc. will operate as a subsidiary of D. E. Shaw Laminar Portfolios, L.L.C., whose activities include the deployment of capital in connection with the restructuring of companies with valuable assets that may currently be experiencing financial distress. D. E. Shaw Laminar Portfolios is a member of the D. E. Shaw group, a New York-based investment and technology development firm with approximately $8 billion in aggregate capital.

"We're excited at the prospect of growing the eToys Direct business, especially by expanding alliances with established online and catalog retailers," said Max Holmes, a managing director of D. E. Shaw & Co., L.P. and head of the firm's distressed securities group. "In addition, the acquisition will be an excellent complement to the online business of FAO Schwarz, which we acquired in January."

KB Toys, Inc. is the nation's largest mall-based specialty toy retailer. It is a more than 80-year old company, privately held and headquartered in Pittsfield, Massachusetts.

"The outlook revision reflects Standard & Poor's expectation that Leiner's improved operating performance is sustainable," said Standard & Poor's credit analyst Martin Kounitz. "However, while a component of the company's financial risk has improved with higher profitability, this improvement is somewhat dimmed by the increased debt levels the company will incur following its planned recapitalization."

The ratings on Leiner reflect the company's customer concentration, the lack of pricing flexibility in the highly competitive private-label vitamin market, the segment's vulnerability to adverse publicity, and the company's leveraged capital structure. These risk factors are somewhat mitigated by the company's solid market positions in private-label vitamins, minerals, and supplements (VMS), and in over-the-counter (OTC) drugs. The ratings also derive strength from the company's strong product innovation, its high customer service levels, and demographic trends that will support its products. At many retailers, private-label products are growing faster than their branded counterparts.

Carson, California-based Leiner is the largest U.S. private-label VMS manufacturer; that sector accounts for about 70% of company sales, while the remainder comes from OTC drugs. The company also markets its own brands, including the Your Life trademark. About 60% of its sales are to its top three accounts. The company's products are mainly sold under private labels through mass merchandisers, grocery and supermarket chains, drug stores, and warehouse clubs. Given the lower pricing inherent in the private-label business and the company's customer concentration, pricing flexibility is limited. The VMS category is also vulnerable to negative press reports on the efficacy of these products that can have a significant effect on sales trends.

LIBERATE TECH: U.S. Trustee Meeting with Creditors on June 4------------------------------------------------------------The United States Trustee will convene a meeting of liberate Technologies' creditors at 1:00 p.m., on June 4, 2004 in Room 2112 at J. Caleb Boggs Federal Building, 2nd Floor, 844 King Street, Wilmington, Delaware 19801. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors.

Headquartered in San Mateo, California, Liberate Technologies -- http://www.liberate.com/-- is a provider of software and services for digital cable systems. The Debtor's software enables cable operators to run multiple digital applications and services including interactive programming, high definition television, video on demand, personal video recorders and games, on multiple platforms. The Company filed for chapter 11 protection on April 30, 2004 (Bankr. Del. Case No. 04-11299). Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $257,000,000 in total assets and estimated debts of over $50 million.

LOEWEN GROUP: Creditor Liquidating Trust Issues Q1 Status Report ----------------------------------------------------------------Wells Fargo Bank Minnesota, N.A., Trustee of the Loewen Creditor Liquidating Trust, delivered its Status Report to the Court covering the period from January 1, 2004 through March 31, 2004. Wells Fargo also serves as Transfer Agent and Registrar of the Trust under the Trust Agreement.

The Advisory Board

Wells Fargo advises that, as required by the Trust Agreement, the Report for the Fourth Quarter of 2003 was approved by the Trust Advisory Board during a meeting held on February 17, 2004.

Prime Succession Warrants

Maureen D. Luke, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, counsel to the Trustee, reports that on January 29, 2004, the liquidating plan for Prime Succession, Inc., and its debtor-affiliates, became effective. Accordingly, the Prime Succession Warrants were cancelled and could no longer be exercised. The Prime Succession Warrants no longer have any economic value to the Trust.

NAFTA Litigation

On June 26, 2003, the NAFTA Tribunal issued its decision in the NAFTA Litigation, ruling in favor of the United States, concluding that the Tribunal did not have jurisdiction to rule on the NAFTA Litigation. Alderwoods declined to petition the NAFTA Tribunal for reconsideration, vacatur or clarification of the Decision.

However, both the United States and Raymond Loewen asked the NAFTA Tribunal to render a supplemental Decision as to Raymond Loewen's claim under Article 1116 of NAFTA. These requests are pending before the NAFTA Tribunal.

During the Report Period, the Trustee made no distribution with respect to the NAFTA Net Proceeds.

Distributions by the Trust

A summary of Trust Units distributions for the period from January through March 2004 reflects:

For the Reporting Period from January through March 2004, Bingham McCutchen, LLP's fees reached $16,999.50, with $75.66 reimbursement for expenses, for a total of $17,075.16. Young Conaway Stargatt & Taylor, LLP's fees equal $236.50, and disbursements amount to $23.54, for a total of $260.04.

MASTEC INC: S&P Downgrades Low-B Ratings & Keeps Negative Watch---------------------------------------------------------------Standard & Poor's Ratings Services lowered its corporate credit rating on MasTec Inc. to 'B' from 'BB-', its senior secured bank loan rating to 'B+' from 'BB', and its subordinated debt rating to 'CCC+' from 'B'. At the same time, all ratings remain on CreditWatch with negative implications, where they were placed on March 17, 2004.

Total debt (including present value of operating leases) was $226 million at Sept. 30, 2003, for the Miami, Fla.-based provider of infrastructure services.

The downgrade follows MasTec's announcement of a net loss for the 2004 first quarter that is significantly greater than the year-earlier loss as well as a delay in its Form 10Q filing for the first quarter because of an unfinished audit for full-year 2003. market conditions in the specialty contractor industry are weak, resulting in declining margins and higher leverage.

"We continue to be concerned about the breakdown of certain financial controls and policies, the length of time it is taking to complete the 2003 audit, and the liquidity profile, including obtaining a waiver or amendment to bank covenants," said Standard & Poor's credit analyst Heather Henyon.

Standard & Poor's will meet with management to gain additional insight into how systemic MasTec's financial controls and procedure issues may be, as well as the steps in place to restore credibility of its financial statements. In addition, Standard & Poor's will discuss with management its near-term business strategy to improve operating results.

The $12 million class E and $8.8 million class K certificates are not rated by Fitch.

The upgrades of classes C and D are the result of the transaction's scheduled amortization and ongoing stable performance. As of the April 2004 distribution date, the pool's aggregate principal balance paid down 16.71% to $571.6 million from $686.3 million at issuance. The certificates are currently collateralized by 135 commercial and multifamily mortgage loans, down from 147 loans at issuance. The pool is well diversified both by loan balance, with an average balance of $4.24 million, as well as geographically, with the largest state concentration in Texas (14.31% of the pool). Multifamily properties represent 47.18% of the pool.

Fourteen loans (6.5%) are currently in special servicing, and losses are expected on nine loans upon liquidation. The largest specially serviced loan (1.1%) is secured by a 288 unit multifamily property located in Charlotte, NC and is 30 days delinquent. The occupancy level of the property has declined as a result of increased competition in the area. The borrower is attempting to negotiate a forbearance agreement that would allow the necessary repairs to the property, as the current cash flow is not sufficient to cover debt service as well as repairs.

The second largest specially serviced loan (0.9%) is a multifamily property located in Dallas, TX and is 90+ days delinquent. The property's performance has suffered from a general downturn in the economy for multifamily properties in Dallas, TX.

MIRANT: PwC Provides Update on Canadian Debtors' Plan Process-------------------------------------------------------------PricewaterhouseCoopers, Inc., as the Canadian Debtors' Monitor, recounts that on April 22, 2004, the CCAA Court approved the Plan of Arrangement.

After the Canadian Debtors implemented the terms and conditions of the Plan, it is the Monitor's understanding that the Canadian Debtors' operations will be limited to three trading contracts with Duke Energy Trading and Marketing, LLC, Engage Energy Canada, LP, and The Natural Gas Exchange.

Affected Creditors

Schedule A to the Plan is a List of Affected Creditors. Since the Plan was approved, the Monitor reports that these changes have been made to the list:

(a) Dough Doane's claim has been accepted by the Canadian Debtors;

(b) The amount of Enron Canada Corporation's claim has been agreed to be $31,960,147;

(c) Nova Gas Transmission's claim has been withdrawn, as the outstanding balance has been satisfied in full through security held by the creditor;

(d) Shondell Sabad's claim has been accepted by the Canadian Debtors; and

The Canadian Debtors are currently advancing settlement discussions with TransCanada and West Coast.

On April 6, 2004, Enron made an offer to the Canadian Debtors that a separate account payable of $665,454 it allegedly owed to the Canadian Debtors is to be deducted from the dividend payable pursuant to the Plan, with the conversion to Canadian Dollar from U.S. Dollar to take place as of the day prior to the distribution of Enron's dividend.

Advice and Directions

At this time, the Monitor seeks advice and direction from the CCAA Court on these matters:

(a) Authorizing and directing the Monitor to make payments of a reduced dividend to Enron in accordance with Enron's proposal; and

(b) Advising what, if any, amount should be held by the Monitor in respect of the Chrumka claim.

Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. The Company filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000)

The preliminary ratings are based on information as of May 11, 2004. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, A-3, A-4, B, C, and D are being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the conduit (not including co-op loans) portion of the pool has a debt service coverage (DSC) of 1.59x, a beginning LTV of 82.8%, and an ending LTV of 66.5%. The residential cooperative portion of the pool (16.7% of the pool balance) has a beginning LTV of 15.4% and an ending LTV of 12.0%. Overall, the collateral pool has a DSC of 2.69x, a beginning LTV of 71.5%, and an ending LTV of 57.4%.

NAVIGATOR GAS: Court Sets May 17 as Administrative Claims Bar Date------------------------------------------------------------------On March 17, 2004, the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Official Committee of Unsecured Creditor's Second Amended Chapter 11 Plan of Reorganization for Navigator Gas Transport PLC and its debtor-affiliates.

May 17, 2004, at 4:00 p.m. is the deadline for creditors to file proofs of claim against the debtors arising on or after Jan. 27, 2003 that constitute a cost or expense of administration in the debtor's chapter 11 cases. Administrative Claims should be filed with:

Clerk of Court U.S. Bankruptcy Court for the Southern District of New York One Bowling Green, New York New York 10004

Navigator Gas Transport Inc.'s business consists of the transport by sea of liquefied petroleum gases and petrochemical gases between ports throughout the world. The Company owns and operates five 22,000 cubic meter Liquefied Petroleum Gas Carriers built in 2000. The company filed for chapter 11 protection on January 27, 2003 (Bankr. S.D.N.Y. Case No. 03-10471) before the Honorable Cornelius Blackshear. The Debtors' counsel is Adam L. Shiff, Esq. of Kasowitz, Benson, Torres & Friedman LLP.

NEW HEIGHTS: First Creditors' Meeting Scheduled for June 7----------------------------------------------------------The United States Trustee will convene a meeting of New Heights Recovery & Power, LLC's creditors at 10:00 a.m., on June 7, 2004 in Room 2112 at the J. Caleb Boggs Federal Building, 844 King Street, Wilmington, Delaware 19801. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors.

Headquartered in Ford Heights, Illinois, New Heights Recovery & Power, LLC -- http://www.tires2power.com/-- is the owner and operator of the Tire Combustion Facility and other tire rubber processing facilities. The Company filed for chapter 11 protection on April 29, 2004 (Bankr. Del. Case No. 04-11277). Eric Lopez Schnabel, Esq., at Klett Rooney Lieber & Schorling represents the Debtor in its restructuring efforts. When the Company filed for chapter 11 protection, it listed both its estimated debts and assets of over $10 million.

NRG ENERGY: Posts $30 Million Net Income for Q1 2004 ----------------------------------------------------NRG Energy, Inc. (NYSE:NRG) reported solid earnings and robust cash flow for the first quarter of 2004, including net income of $30 million, or $0.30 per diluted share. Cash flow from operations was $350 million for the quarter.

"Favorable market conditions, including sustained high gas prices and manageable western coal prices, underpinned by solid operating performance across the portfolio resulted in strong first quarter financial results for NRG," said David Crane, NRG's President and Chief Executive Officer. "I am pleased that we stayed focused on execution while making the transition out of Chapter 11."

Financial Highlights

-- $350 million in cash flow from operations including $125 million net from Xcel settlement;

-- $259 million in EBITDA ($266 million in adjusted EBITDA) for the first quarter;

-- $30 million in net income ($34 million in adjusted net income) for the first quarter;

NRG's strong financial results were supported by our facilities' excellent operational performance. Plant staff maintained focus on operating our plants enabling the Company to realize good margins in the energy market. All of the regions achieved an in-market availability rate--the measure of how frequently a unit is available when called on to operate--of 95 percent or greater.

High gas prices throughout the first quarter led to higher energy prices, which helped to widen the energy revenue margin realized at NRG's baseload coal facilities in the Northeast region. Because the Company hedged over 90 percent of our estimated coal needs for 2004 prior to the recent rise in coal prices, we largely have been spared the volatility of the spot eastern coal market. In addition, NRG has reduced our dependence on eastern coal as we are converting some of our coal facilities in the Northeast to burn a blend of eastern and western coal. This conversion program is aimed at substantially reducing sulfur emissions from NRG's coal-fired plants.

The Company took advantage of the high gas price environment by hedging forward a portion of our northeastern coal-fired generation for the balance of 2004. In New York and New England, NRG has contracted sales for 500 megawatts (MW) of baseload coal generation for the remainder of the year. The Company also sold 700 MW (maximum) of load following capabilities as a part of the New Jersey Basic Generation Service auction and the Maryland Standard Offer Services Request for Proposal process.

During the first quarter, NRG took additional steps to stabilize our Connecticut portfolio. In mid-March FERC approved NRG's request to receive RMR payments retroactive to January 17, 2004 for certain of our Connecticut facilities. The RMR agreements cover Middletown, Montville, and Devon units 11-14. FERC also approved an extension of NRG's operating and maintenance expense cost tracker for these facilities and Norwalk Harbor. Previously, Devon 7 and 8 received FERC approval on a separate RMR agreement. However, the RMR agreement for Devon 8 has since expired and the unit will be retired, pursuant to a declaration by the New England Independent System Operator that the unit is no longer needed for reliability. These RMR agreements are expected to contribute up to $30 million in revenues per quarter subject to refund and will remain in place at least until the locational installed capacity (LICAP) market is implemented in New England.

"We've made significant progress with our Connecticut assets," said Crane. "In addition to the expiration of the cash negative Connecticut Light & Power contract, these RMR agreements will provide us with a recovery of our costs sufficient to keep these units available to support the reliability and integrity of the Connecticut electrical grid."

Liquidity and Cash Flow

Liquidity, as of March 31, 2004, remains healthy at almost $1.4 billion.

NRG continues to make progress in divesting noncore assets. In the first quarter, NRG completed asset sales resulting in $3 million in cash proceeds. Subsequent to March 31, NRG has completed sales resulting in $94 million in cash proceeds. Additionally NRG has executed a purchase and sale agreement for our Batesville facility, which will further reduce debt by $292 million and contribute cash proceeds of $27 million.

California Dispute Resolution

In late April, West Coast Power, a 50/50 joint venture beneficially owned by NRG and Dynegy, reached a settlement with FERC, Pacific Gas and Electric Company, San Diego Gas and Electric Company, Southern California Edison, The California Department of Water Resources (CDWR), the California Electricity Oversight Board, the California Attorney General, and the California Public Utilities Commission. This settlement puts an end to a substantial portion of the litigation associated with the California crisis and should open the door for West Coast Power to negotiate or bid on new commercial arrangements to replace the CDWR contract when it expires on December 31, 2004. This settlement has no impact on the Company's financial position.

Outlook

Notwithstanding our robust first quarter financial performance, NRG continues to operate our core business in an overbuilt and challenging wholesale power generation market. The structural change required to cause a general recovery in the commodity price cycle for electricity has yet to occur. Moreover, our business continues to be highly seasonal and weather dependent with the first and third quarters historically being the strongest. As such, our current focus is on ensuring that all of our plants achieve the highest possible level of availability for the summer peak season.

About NRG

NRG Energy, Inc. owns and operates a diverse portfolio of power-generating facilities, primarily in the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities.

NRG ENERGY: Appoints Ingoldsby & Angoorly as Vice Presidents------------------------------------------------------------NRG Energy, Inc. (NYSE:NRG) announced a number of appointments that serve to flesh out the Company's management team. NRG named James Ingoldsby the Company's Vice President and Controller and Caroline Angoorly as Vice President, New Business.

In his role as Vice President and Controller, Ingoldsby directs NRG's financial accounting and reporting activities, as well as ensuring the Company's compliance with Sarbanes-Oxley legislation. Ingoldsby, who led the Sarbanes-Oxley implementation at chemical company Hercules, Inc. previously held various executive positions at General Electric Betz, formerly Betz Dearborn, including serving as Controller and Director of Business Analysis. Ingoldsby reports to Robert Flexon, NRG's Chief Financial Officer.

As Vice President, New Business, Angoorly will spearhead the Company's initiatives in the environmental arena, including renewables, new technologies, environmental remediation and compliance. She will also manage NRG's Resource Recovery business. Angoorly comes to NRG from Enel North America, Inc. where she served as Vice President and General Counsel. Prior to joining Enel in 2001, she served as the Director and Chief Financial Officer at Line56Media and from 1994 to 2000 she was a partner in the Global Finance Group at Milbank, Tweed, Hadley & McCloy. Angoorly will report to David Crane.

About NRG NRG Energy, Inc. owns and operates a diverse portfolio of power-generating facilities, primarily in the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities.

PACIFIC ENERGY: Acquires Rangeland Pipeline for $116 Million------------------------------------------------------------Pacific Energy Partners, L.P. (NYSE:PPX) announced the closing of the previously announced acquisition of the Rangeland Pipeline System from BP Canada Energy Company, by two wholly-owned subsidiaries of the Partnership. The Rangeland Pipeline System, which is located in the province of Alberta, Canada, consists of Rangeland Pipeline Company, Rangeland Marketing Company and Aurora Pipeline Company Ltd.

The acquisition price for the Rangeland Pipeline System is Canadian $130 million plus approximately Canadian $29 million for line fill, working capital, transaction costs and transition capital expenditures. The aggregate purchase cost is approximately US$116 million.

Irv Toole, President and Chief Executive Officer, said, "This acquisition is a continuation of our regional development plans in the Rocky Mountain region and provides a unique and strategic opportunity for Pacific Energy Partners to participate in providing needed transportation services associated with the expected increase in production of synthetic crude from the Alberta oil sands. This new system is expected to have significant synergies with the Partnership's U.S. pipeline systems and will enable us to provide expanded services to our Rocky Mountain customers."

The Rangeland Pipeline System consists of approximately 800 miles of gathering and trunk pipelines. It is a bi-directional system capable of gathering crude oil, condensate and butane and transporting these commodities either north to Edmonton, Alberta, via third-party pipeline connections or south to the U.S. border near Cutbank, Mont., where it connects to the Western Corridor system, in which the Partnership owns an undivided interest. The trunk pipeline from Sundre Station to the U.S. border has a current capacity of approximately 85,000 bpd in light crude service.

Pacific Energy Partners, L.P. (Moody's, Ba2 Corporate Credit Rating) is a Delaware limited partnership headquartered in Long Beach, California. Pacific Energy Partners is engaged principally in the business of gathering, transporting, storing and distributing crude oil and other related products in California and the Rocky Mountain region. Pacific Energy Partners generates revenues primarily by charging tariff rates for transporting crude oil on its pipelines and by leasing capacity in its storage facilities. Pacific Energy Partners also buys, blends and sells crude oil, activities that are complimentary to its pipeline transportation business.

PACIFIC GAS: Pays $128 Million Franchise Fee To Local Governments-----------------------------------------------------------------On April 15, 2004, Pacific Gas and Electric Company announced it has made its 2003 franchise fee and franchise fee surcharge payments, totaling $128 million, to the 292 California cities and counties in which it operates. The 2003 payments are comprised of $50.8 million for gas and $77.6 million for electric service franchises and surcharges.

"As local governments face extremely tight budgets, Pacific Gas and Electric Company recognizes the importance of its franchise fee payments to cities and counties," said Kent Harvey, chief financial officer of Pacific Gas and Electric Company. "These revenues, in part, support the many important services residents expect from their local government -- police and fire protection, education, public health, and environmental services."

Franchise fee payments fluctuate depending on the costs utility customers pay for gas and electricity. The 2003 franchise fee payments represent a 13 percent increase over the 2002 payments -- which were $34.4 million for gas and $78.6 million for electric -- due to increased natural gas prices.

A franchise fee is based on a percentage of gross customer receipts received by Pacific Gas and Electric Company, and is paid to cities and counties for the right to use public streets to run gas and electric service. A franchise fee surcharge is based on a percentage of the transportation and energy costs to customers choosing to buy their energy from third parties. PG&E serves as the collection agent for the surcharges and passes the amounts on to cities and counties.

PG&E began making $128 million in franchise fee and franchise fee surcharge payments in late March when nearly $42 million in payments were made to the 49 counties in which it operates. The remainder of the payments*, more than $86 million, will be paid to the 242 cities in northern and central California on or before April 15. The payments to cities began the week of April 5, 2004.

Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly-owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. (Pacific Gas Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000)

PACIFIC WEBWORKS: Needs More Capital to Develop Business Plan-------------------------------------------------------------Pacific WebWorks, Inc. had negative working capital of $91,016 as of December 31, 2003, which means it was unable to satisfy its total current liabilities, including those of its discontinued operations, with current assets and must continue to negotiate favorable settlements for these liabilities. The Company plans to address only the liabilities of its operating subsidiaries with its cash. Management expects to continue to generate positive cash flows through further development of business and sales.

Pacific WebWorks indicates that it operates in a very competitive industry in which large amounts of capital are required in order to continually develop and promote products. Many of its competitors have significantly greater capital resources. The management of Pacific WebWorks believes the Company may need an additional $1 to $2 million in 2004 to continue to keep up with technological improvements and further its business development strategies. Management further believes that the Company may need to raise additional capital, both internally and externally, in order to successfully compete.

Should external capital be required for operations or acquisitions, the Company may structure private placements of its common stock pursuant to exemptions from the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to Company financial needs and the available exemptions. Management notes that if Pacific WebWorks issues more shares of its common stock its stockholders may experience dilution in the value per share of their common stock.

The Company may not be able to obtain additional funds on acceptable terms. If it fails to obtain funds on acceptable terms, the Company might be forced to delay or abandon some or all of its marketing or business plans and growth could be slowed, which may result in declines in its operating results and common stock market price.

The Company's sales decreased during the first half of 2003 primarily due to steady attrition of its monthly hosting and payment processing service portfolios with no significant replacement of monthly paying customers through December 31, 2003. In addition, new marketing plans and strategies implemented in the last quarter of 2003 resulted in the deferral of certain revenues until the earnings process is complete. The Company recognizes hosting, gateway and transaction service revenues in the period in which fees are fixed or determinable and the related products or services are provided to the user. Advance payments and upfront fees from customers are recorded on the balance sheets as deferred revenues. Training and design revenues are recognized as the related services are performed.

The increase in cost of sales for the 2003 year was primarily related to new marketing strategy and related increases in reseller fees.

Total operating expenses for the 2002 year decreased 4.5% compared to the 2003 year. However, selling expenses nearly doubled while research and development expenses decreased 45.9%, general and administrative expenses decreased 7.4%, depreciation and amortization decreased 39.7% and compensation expense related to options and warrants decreased 75.5%. These compensation expenses relate to warrants granted to consultants in 2001 and 2002, which expire through May 2004. The compensation expense represents the fair market value of the warrants, estimated on the date of grant. The decrease in compensation expense for 2003 was primarily a result of full recognition of the intrinsic value of options charges over vesting periods through September 2001 and a lower fair value of new warrants granted to consultants in 2002.

The investment fund headed by Norberto Morita has submitted a letter indicating its intention to acquire not only Parmalat Argentina assets, but also those in Chile and Uruguay, which are being divested by Italian parent Parmalat Finanziaria SpA as part of its global restructuring plan.

A representative of Parmalat administrator Enrico Bondi is in Argentina underlying the structure and legal procedures for the sale of the Argentine unit. Parmalat Argentina has hired KPMG, LLP, to gather and evaluate bids. The law firm Allende & Brea will take care of the legal issues.

Though none of these companies have made official statements, New Zealand's Fonterra (partnered with Nestle), Spanish Iparlat and Danish Arla Foods are also after Parmalat's assets. Danone, who is only interested in the brands, would be a step behind, since Parmalat wants to sell its two plants along with the brands. Kraft, which was invited by the sale organizers, denied being interested.

Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding.

Headquartered in Rock Hill, South Carolina, Plej's Linen Supermarket SoEast Stores LLC, with its debtor-affiliates, are engaged primarily in two core businesses: retail sale of first quality program home accessories for bed, bath, window, decorative and house wares and limited closeout and discontinued opportunistic merchandise; and wholesale distribution of similar bed and bath textiles. The Company filed for chapter 11 protection on April 15, 2004 (Bankr. W.D. N.C. Case No. 04-31383). John R. Miller, Jr., Esq., and Paul R. Baynard, Esq., at Rayburn Cooper & Durham, P.A., represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed both estimated debts and assets of over $10 million.

PRIMARY BUSINESS: Madsen & Associates Replaces Sellers as Auditors ------------------------------------------------------------------On February 19, 2004, Primary Business Systems Inc. dismissed Sellers & Andersen, LLC from its position as the Company's independent accountants. Sellers & Andersen served as the independent auditors for the fiscal years ended December 31, 2002 and 2001.

The audit reports of Sellers & Andersen, LLC for the fiscal years ended December 31, 2002 and 2001 included an opinion regarding the Company's ability to continue as a going concern.

The Company's Board of Directors participated in, and approved, the decision to change independent accountants. The new accountants have been retained to audit the Company's financial statements for its fiscal year ended December 31, 2003.

On February 19, 2004, Primary Business Systems engaged Madsen & Associates, CPA's Inc., to audit its financial statements for the period ended December 31, 2003.

"The company's profitability is significantly below Standard & Poor's expectations," said Standard & Poor's credit analyst Martin S. Kounitz. "This, as well as liquidity concerns, led to the company's downgrade."

EBITDA for the 12 months ended March 31, 2004, declined 57% compared with the previous year. Salton invested heavily in advertising in this period, as well as in promotion for new products that did not perform as anticipated. At the same time, competition in the small appliance category greatly intensified.

Salton faces significant near-term challenges, including the need to obtain a suitable amendment to its bank facility. It is also uncertain whether the company can meet the significant interest payments on its subordinated debt, which present additional downside credit risk. However, there could be some modest upside potential for the rating if the company addresses its near-term financial needs and demonstrates a more favorable business outlook.

SOLUTIA INC: Retirees Apply to Retain Segal Company As Actuary--------------------------------------------------------------The Official Committee of Retirees in Solutia, Inc.'s chapter 11 case seeks the Court's authority to retain Thomas Levy, Stuart Wohl and The Segal Company to provide actuarial and benefit consulting services.

Daniel D. Doyle, Esq., at Spencer Fane Britt & Brown, in St. Louis, Missouri, relates that The Segal Company is an international actuarial benefit consultant firm with approximately 1,000 employees and employs more than 100 credentialed actuaries.

Approximately 9,800 retirees and 9,700 of their spouses and dependents receive health, life and disability benefits pursuant to benefit plans maintained by Solutia, Inc., prior to the Petition Date. These health, life and disability benefits constitute "retiree benefits" for purposes of Section 1114 of the Bankruptcy Code.

Mr. Doyle states that lead Segal consultants Thomas Levy and Stuart Wohl have substantial experience in the evaluation of retiree benefits in Section 1114 proceedings and in other arenas.

Mr. Levy is a Fellow of the Society of Actuaries and a Senior Vice President and the Chief Actuary of Segal. He has been with the Company since 1968. Mr. Levy is responsible for coordinating all professional actuarial activities company-wide. He has overall responsibility for Segal's actuarial practice and chairs its Actuarial Managers' Committee. Mr. Levy has served two terms as Chairperson of the Pension Committee of the Actuarial Standards Board that established practice standards for pension actuaries in the United States. Mr. Levy was also involved in the drafting the Actuarial Standards related to Retiree Health Valuations.

Mr. Wohl is a Vice President and Retiree Health Practice Leader of Segal and has been with the Company since 1988. Mr. Wohl's particular expertise is in the valuation, pricing and design of retiree health benefits. Mr. Wohl has been involved in the establishment of many retiree health trusts. These trusts were established for retirees from Eastern Airlines, Pan American Airways and others.

The Segal Company will provide these services to the Retiree Committee:

(a) review and analysis of current retiree benefit plans;

(b) consulting with American Express Tax and Business Services, Inc., financial advisor, to formulate a retiree benefit plan;

Mr. Wohl tells the Court that Segal is not retained by the Debtors or any other party-in-interest in the Chapter 11 case, with these exceptions:

(a) Segal performs actuarial and benefit consulting work for the United Food and Commercial Workers Union Staff Plans. Some of the affected retirees were members of the Chemical Workers Council, part of the UFCW;

(b) Segal performs actuarial and benefit consulting work for the United Steelworkers of America Union as well as providing benefit negotiation support. Some of the affected retirees were members of the USWA;

(c) Sibson Consulting, a wholly owned subsidiary of Segal, is a provider of human resource consulting service. Sibson has ongoing consulting relationships with Pfizer in performance management, training and communications.

The Segal Company was involved as actuary and consultant to counsel for the Chemical Workers Council of the United Food and Commercial Workers, the United Steelworkers of America, and the Salaried and Management Retirees in prior litigation with the Debtors concerning retiree benefits.

Mr. Wohl submits that Segal is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code and holds no adverse interest against the Debtors.

Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Company filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000)

Specifically, pursuant to an agreement dated June 20, 2001, Hughes Network provided the Spiegel Group Debtors with the use of the VSAT network to transmit sales and inventory data from their stores around world to their data processing facility in Westmont, Illinois. As contemplated by the Hughes Contract, Hughes Network also provides data transmission, installation and maintenance services at each new store location requested by the Debtors.The Hughes Contract is due to expire according to its terms on June 30, 2004. According to Mr. Garrity, the remaining payments due under the Hughes Contract total about $295,000. Hughes Network has filed a proof of claim in the Debtors' Chapter 11 cases for $246,098.

The Debtors have determined that employing a landline system to transmit data between their stores and their data processing facility is far less expensive than utilizing the satellite data transmission services provided by Hughes Network. Since the Debtors have already obtained alternative landline services, they no longer require the use of services provided under the Hughes Contract.

Accordingly, the Court authorizes the Debtors to reject the Hughes Contract.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and 1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)

Consolidated revenues for the first quarter totalled $26.2 million, a decrease of approximately 11.5% from the $29.6 million reported in the first quarter of 2003. Revenues in the first quarter were lower than the prior year largely because the service components of major turnkey contracts were completed in 2003.

The first quarter operating loss was $13.6 million compared to theoperating loss of $7.0 million in the first quarter of 2003. The operating margin in the quarter was negatively impacted by a lower gross profit on sales caused by a change in the product mix and lower volumes. The results were also impacted by a significant increase in operating and R&D expenses related to the acquisition of angel(TM) and airstar(TM). Consolidated net loss was $16.9 million for the quarter, compared to a consolidated net loss of $6.7 million in the corresponding period in 2003. The increase in consolidated net loss is attributable to the factors stated above as well as the impact of a $3.0 million income tax recovery in 2003 that was not replicated this year.

"As we expected, the first quarter of 2004 provided disappointingresults," said Pierre St-Arnaud, President and Chief Executive Officer of SR Telecom. "Despite this, we are determined to return the Company to profitability by the fourth quarter of this fiscal year. This is why we have put in place a comprehensive streamlining initiative. Our program is now being implemented, and when it is completed, we will have reduced our core wirelessbreak-even revenue point to approximately $135 million on an annual basis. We also expect an increase in revenue over the coming quarters. New frame contracts and firm purchase orders received over the last six months now total in excess of $200 million, which includes the recent contract wins in Senegaland Latin America we announced earlier this week. Some of these frame contracts extend over two to three years."

Restructuring Initiative

On April 30, 2004, SR Telecom began a restructuring initiative that will significantly reduce its cost base. Highlights of the plan include the closure of the Company's Redmond, Washington facility, concentrating research and development activities in Montreal, and focusing SR Telecom's operations in France on sales and customer support. A restructuring plan is currently beingfinalized with the workers' council in France.

"With this initiative, our global operations will be reorganized and better integrated," Mr. St-Arnaud said. "By concentrating our R&D expertise in Montreal, we will be able to focus more efficiently on the continuing development of our angel, airstar and SR500ip(TM) products, and the transfer of our core resources from Redmond to Montreal will ensure that we will be able to provide uninterrupted service to our customers."

Mr. St-Arnaud also commented on the Company's WiMAX activities.SR Telecom is an active member of the WiMAX forum.

"Much has been said in the industry about WiMAX. In fact, the project in which we are currently engaged in Spain involves working with Telefonica to develop a version of angel that conforms to the WiMAX standard. Consolidating our R&D activities in Montreal will also enable us to accelerate our WiMAXdevelopment project."

David Adams, SR Telecom's Senior Vice-President, Finance and CFO,explained that restructuring charges will be recognized as they occur during the second and third quarters of the current fiscal year. These charges are estimated to be $15 million, of which approximately $11 million will be in cash costs.

"We anticipate that the restructuring measures will reduce our SG&A and R&D costs by more than one third on an annualized basis, which represents a savings of approximately $30 million on an annualized basis compared to the first quarter," Mr. Adams said. "Moreover, we fully expect to generate positive EBITDA in excess of $20 million on an annualized basis during the fourth quarter."

Core Wireless Solutions Segment

First quarter revenues in SR Telecom's core wireless solutions business were $21.6 million, compared to $26.0 million during the same period last year. Equipment revenues during the quarter remained at the same $16.5 million level reported last year, while service revenues decreased as the service components of major turnkey contracts were completed in the prior year's period.

CTR

Revenues at CTR were $4.6 million in the first quarter, compared to $3.6 million in the same period last year. In peso terms, net revenue increased in the first quarter by 310 million pesos to 2,075 million pesos. The increase is partially attributable to the increase in access tariffs approved by the Chilean regulator, Subtel, which came into effect on March 1, 2004. CTR's revenues have also been affected by the increase in the value of the Chilean peso compared to the Canadian dollar.

The net loss from CTR was $1.8 million for the quarter, compared to a gain of $1.2 million in the same period in 2003. Fluctuations in the Canadian dollar, U.S. dollar and Chilean peso on the assets and liabilities of CTR, in particular the US dollar denominated debt, resulted in a foreign exchange loss of $0.7 million for the three months ended March 31, 2004, compared to the foreign exchange gain of $4.0 million in the first quarter of 2003.

"We anticipate that the tariff rate increase will contribute in excess of $1.5 million to CTR's operating cash flow on an annualized basis," said Mr. Adams. "Further, we are proceeding with our previously announced initiative to deploy up to 6,000 new lines into several urban areas of Chile using surplus angel inventory. Once completed, this expansion will help to increase voice and Internet revenues at CTR, and will ensure the completion of the project."

Financial Position

SR Telecom's cash and short-term investment position, includingrestricted cash, was $46.7 million as at March 31, 2004, a significant increase from the $18.7 million reported at December 31, 2003. The increase results from the February 2004 equity financing, for which the Company realized net proceeds of $46.8 million. The financing has generated significant additional working capital to fund operations. "Additionally, we expect that the effects of the restructuring program, combined with thecollection of long term receivables tied to contract performance in the second and third quarters, and the contribution of the new contracts recently announced will lead to positive cash flow in the second half of the year. At year end, we expect to have cash resources in excess of $25 million to fund operations and contribute to the refinancing of the balance sheet," saidMr. Adams.

Backlog

Backlog at the end of the first quarter of 2004 stood at $36 million, down from the $65 million reported at the end of the first quarter in 2003, but an increase from the $27 million at the end of fiscal year 2003. The Company's backlog is now comprised of many short term orders that turn over more quickly than in the past and consists solely of purchase orders received for delivery in future periods. Backlog does not contain any credit foranticipated deliveries under frame contracts in progress. Currently, significant orders are expected to be generated under these frame contracts, which include projects in Spain, Africa, Southeast Asia and Latin America, and from the introduction of the newly acquired product lines, airstar and angel. However, the timing of these orders cannot be identified with certainty.

Outlook

"We anticipate revenue growth over the coming quarters, and ourcomprehensive restructuring will significantly reduce our cost base," Mr. St-Arnaud said. "Restructuring charges will have an impact on our second and third quarter results, but we are positioned to achieve profitability in our core wireless business in the fourth quarter of this year."

About SR Telecom

SR TELECOM (TSX: SRX, Nasdaq: SRXA) is one of the world's leadingproviders of Broadband Fixed Wireless Access (BFWA) technology, which links end-users to networks using wireless transmissions. For over two decades, the Company's products and solutions have been used by carriers and service providers to deliver advanced, robust and efficient telecommunications services to both urban and remote areas around the globe. SR Telecom's products have been deployed in over 120 countries, connecting nearly two million people.

As reported in the Troubled Company Reporter's May 05, 2004edition, Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on SR Telecom Inc. to 'CCC' from 'CCC+'. The outlook is negative.

The negative outlook reflects the possibility that the ratings onSR Telecom could be lowered further if the company's operatingperformance and liquidity position do not improve.

SR TELECOM: Signs $13 Mil. Contract with Telecom Provider Sonatel -----------------------------------------------------------------SR Telecom(TM) Inc. (TSX: SRX; Nasdaq:SRXA) announced that it has signed an agreement valued at approximately $13 million with Sonatel, the national telecommunications provider in Senegal.Sonatel has selected the SR500 fixed wireless access system for a rural communications development project aimed at meeting the Senegalese government's ongoing universal access objectives. Sonatel expects to issue the majority of its equipment purchase orders in 2004. The remaining orders will be placed in early 2005.

Adding to its already large network of SR500 systems, Sonatel will deliver voice, fax and Internet services to its customers. Upon completion of this project, SR500 will be installed in more than 650 villages across the country. SR Telecom will also provide certain services, including field surveys, network design, installation, training and project management.

"This contract is the result of the longstanding business relationship we have built with Sonatel," said Pierre St-Arnaud, SR Telecom's President and Chief Executive Officer. "Since the late 1980's, Sonatel has demonstrated a strong belief in the benefits of fixed wireless access technology and servicesthat SR Telecom provides. We are pleased with Sonatel's choice of SR500, which has proven to be the ideal choice for meeting universal access objectives in remote communities."

About SR500

The SR500 is a high-capacity point-to-multipoint fixed wireless access system that enables operators to extend their reach and deliver a full range of tailor-made voice and data applications to end-users in remote locations. Designed for the harshest environments, SR500 is a robust system built on field-proven technology and supports a variety of network and end-userinterfaces. With a reach of up to 720 kilometres from the central station, the SR500 boasts the longest reach in the industry and has the largest installed base in the world.

About Sonatel

Sonatel is Senegal's national telecommunications carrier. It offers a full range of telephony and Internet services through its fully digital network. For more information, please visit their web site http://www.sonatel.sn/

About SR Telecom

SR TELECOM (TSX: SRX, Nasdaq: SRXA) is one of the world's leadingproviders of Broadband Fixed Wireless Access (BFWA) technology, which links end-users to networks using wireless transmissions. For over two decades, the Company's products and solutions have been used by carriers and service providers to deliver advanced, robust and efficient telecommunications services to both urban and remote areas around the globe. SR Telecom's products have been deployed in over 120 countries, connecting nearly two million people.

* * *

As reported in the Troubled Company Reporter's May 05, 2004edition, Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on SR Telecom Inc. to 'CCC' from 'CCC+'. The outlook is negative.

The negative outlook reflects the possibility that the ratings onSR Telecom could be lowered further if the company's operatingperformance and liquidity position do not improve.

ST. FRANCIS HEALTH: May 21 is Last Day to Submit Claim------------------------------------------------------ The Liquidating Receiver appointed to oversee the dissolutions of the St. Francis Receiver Entities is in the process of preparing to make payments with respect to the claims and objecting to certain claims submitted against:

Saint Francis Health System is an integrated, medically-based health System with an emphasis on a complete continuum of care. The physicians and staff of Saint Francis provide services for the tiniest premature newborns, to end-of-life care options, to all the needs in between.

The Receivership proceeding pends before the Court of Common Pleas of Allegheny County, Pennsylvania (Orphans' Court Division).

At the same time, Standard & Poor's assigned its 'B+' bank loan rating and its '4' recovery rating to the company's proposed $35 million senior secured revolving credit facility due in 2009 and its $170.5 million first-lien term loan B due in 2011. The '4' recovery rating indicates that Standard & Poor's expects a marginal recovery of principal (25%-50%) in the event of default.

Standard & Poor's also assigned its 'B-' bank loan rating and '5' recovery rating to the company's proposed $35 million senior secured second-lien term loan due in 2011. The '5' recovery rating indicates that Standard & Poor's expects a negligible recovery of principal (0%-25%) in the event of default. The outlook is stable.

The proceeds from the term loans--in addition to $36 million of new loan stock, $75.5 million of new preferred stock, and $5 million of common stock--will be used to fund the $311.5 million financial-sponsor-led buyout of Sterigenics from Ion Beam. (The sponsors are PPM Ventures and PPM America Capital Partners, together known as PPM). Pro forma for the transaction, Sterigenics will have $215 million of total debt outstanding.

The low speculative-grade ratings reflect Sterigenics' single business focus in a competitive industry, its lack of experience operating as an independent firm (although the long tenure of many of Sterigenics' senior managers should somewhat mitigate this concern), and its relatively high debt levels."These concerns are partially offset by the company's well-established market position, favorable industry demand trends, the company's diverse and stable customer base, and its full product offerings," said Standard & Poor's credit analyst Jesse Juliano.

With a market share of about 30%, Sterigenics is the leading provider of sterilization and ionization services, which are the company's only focus. Using its four main technologies (ethylene oxide sterilization, gamma irradiation, electron-beam, and X-ray radiation), the company processes, among other things, medical products, foods, polymers, semiconductors, and gemstones. Sterigenics offers its services to more than 2,000 customers via its 38 facilities worldwide. Its competitors include Steris Corporation, Isotron plc, and Cosmed Group Inc.

Sterigenics should benefit from favorable near-term trends for its core services, as equipment replacement, tighter regulations, and a lack of capacity have swayed potential clients to outsource their sterilization and ionization needs. Currently, 46% of companies provide these services in-house, and this represents a significant growth opportunity for Sterigenics.

TAMBORIL CIGAR: Audit Report Contains Going Concern Qualification-----------------------------------------------------------------Tamboril Cigar Company was engaged in the cigar manufacturing business between October 1996 and April 2000, when it filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Act. The Company engaged in no substantive business activities during the period from April 2000 through December 2003. On December 31, 2003, it entered into a business combination transaction with Axion Power Corporation that was structured as a reverse takeover. Since then Tamboril has been engaged principally in research and development on a nanotechnology enabled hybrid electrochemical storage battery that it refers to as the E 3 Cell.

The E 3 Cell technology relies on a variety of physical and chemical processes to convert activated carbon into highly permeable nanoporous electrodes that the Company uses to replace lead-based negative electrodes. At December 31, 2003, the Company's E 3 Cell technology is proven but unexploited science. The Company's principal short-term goal is to take the E 3 Cell technology from the laboratory prototype stage through initial product rollout. Tamboril is focusing its efforts on engineering and manufacturing process development for its proposed alpha and beta prototypes. Within the first two months of 2004 the Company planned to begin in-house testing its alpha prototypes. The Company is currently negotiating terms for a second stage alpha testing with a major manufacturer of uninterruptible power supplies (UPS)for electronics. If its alpha testing is successful, Tamboril intends to promptly commence a larger beta testing program with its alpha testing partner and several other leaders in the electrical power industry. If its beta testing is successful, the Company plans to develop E 3 Cell products for use in fixed installations such as UPS, backup power systems for telecommunications and cable television networks and surplus energy storage systems for photovoltaic and wind power systems. If its initial commercialization is successful the Company plans to expand its focus and enter the larger market segments including high-performance battery systems for hybrid automobiles and other high-value applications.

Because of the lack of operating history and the early stage of its development, the Company has limited insight into trends and conditions that may exist or might emerge and affect its business. Management cannot be certain that the business strategy will be successful or that Tamboril will successfully address these risks.

The auditors report on Tamboril Cigar's financial statements includes a going concern qualification.

The Company had accumulated losses of $506,300 and a working capital deficit of $791,631 at December 31, 2003. It will not be able to commence second stage beta testing of its proposed products without obtaining additional funds through the sale of securities or from other sources. It is currently seeking additional capital in order to meet its anticipated obligations. While recent sales of securities in private placement transactions alleviate the going concern issues, they do not eliminate them. Accordingly, the independent auditors' report on Tamboril's financial statements for the year ended December 31, 2003 contains a fourth explanatory paragraph that the Company's financial statements have been prepared assuming that the Company will continue as a going concern and that its potential to incur operating losses raises substantial doubt about that assumption. The Company will need additional financing to continue operations.

Tamboril Cigar had approximately $372,500 in cash on December 31, 2003. The ability to continue its research, development and testing will be dependent upon increasing its capital resources. Management believed the Company's cash resources would be adequate for its cash requirements for a period of 30 to 60 days into the new year, 2004. Tamboril will not be able to complete its alpha testing or commence its preliminary beta testing without obtaining additional funds from the sale of additional securities or from other sources. There is no assurance that additional capital will be available to the Company on favorable terms, or at all. If adequate financial resources are not available when required, management states that the Company may be forced to curtail its proposed operations. If it raises additional capital by selling preferred stock, the purchasers may have rights, preferences or privileges that are senior to the rights of its common stockholders. If unable to obtain additional capital when needed, the ability to continue its research and development and product testing activities will be materially and adversely affected.

TOWER AUTOMOTIVE: S&P Rates Unit's $375MM Sr. Secured Loan at B+ ----------------------------------------------------------------Standard & Poor's Ratings Services assigned its 'B+' rating to the five-year $375 million senior secured term loan B and five-year $50 million senior secured revolving credit facility of R.J. Tower Corp. A recovery rating of '2', indicating substantial recovery of principal (80%-100%) in the event of a default was assigned. A 'B-' rating was assigned to R.J. Tower's 5 1/2-year $140 million senior secured term loan C, and a recovery rating of '5', indicating the likelihood of negligible recovery of principal (0%-25%) in the event of a default. The facility will be guaranteed by parent company, Novi, Michigan-based Tower Automotive Inc. (B+/Negative/--).

Proceeds from the new credit facility, along with a planned capital-market transaction, will be used to repay an existing bank credit facility and Tower's $200 million 5% convertible subordinated notes due in August 2004. These transactions will improve financial flexibility by extending debt maturities and increasing available liquidity.

At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Tower. The outlook is negative. At March 31, 2004, total outstanding debt, excluding $259 million of intercompany debt owed to Tower Automotive Capital Trust in connection with the issuance of trust convertible preferred securities, stood at about $1.1 billion.

"Ratings could be lowered should the timing of benefits to be derived from actions to turn the business around be delayed, resulting in the deterioration of credit statistics," said Standard & Poor's credit analyst Daniel DiSenso.

Tower is a leading supplier of vehicle structural components and assemblies to the cyclical and intensely competitive automotive supply industry.

The new management team is taking aggressive steps to reduce costs and improve efficiencies, including rationalizing North American operations, creating a global purchasing/manufacturing function, and strengthening its program launch and management teams. Management is also performing a strategic assessment of the company, including an evaluation of all assets and investments.

Over the next two years debt (adjusted to include the present value of operating leases and treating its convertible trust preferred securities as equity) to EBITDA should strengthen to 4x-4.5x from the 2003 5.2x level, and funds from operations to adjusted debt, which stands at 12%, should remain in the 10%-15% range. Standard & Poor's also expects Tower to maintain adequate liquidity to fund operating needs and to execute its business repositioning plans.

As of Dec. 30, 2003, Houma, Louisiana-based Trico had about $380 million of debt.

"The rating action follows the announcement that Trico will not make its $11.1 million senior notes interest payment due May 15, 2004, and instead will use a 30-day grace period to continue its announced study of strategic alternatives for the company, including the possible restructuring or refinancing of the senior notes," noted Standard & Poor's credit analyst Paul B. Harvey.

Standard & Poor's views Trico's failure to make its scheduled interest payment as an event of default, although indentures on the $250 million senior notes allow a 30-day grace period before Trico would be in default. As such, on missing the May 15 payment, the ratings on Trico and the senior notes would be lowered to 'D'. If Trico makes the interest payment within the 30-day grace period, Standard & Poor's would reevaluate its ratings and outlook on Trico.

It also lowered the rating on UAP's existing $500 million senior secured revolving credit facility to 'B+' from 'BB-'. The lower ratings reflect the company's anticipated more aggressive financial profile after its parent company, UAP Holdings Corp., proposed a $625 million issuance of income deposit securities (IDS).

At the same time, Standard & Poor's assigned a rating of 'CCC' to the senior subordinated notes of UAP Holdings Corp. The ratings on UAP Holdings' existing senior discount notes have been lowered to 'CCC+' from 'B-', while the ratings on United Agri Products' senior unsecured notes have been lowered to 'B-' from 'B'. However, these ratings will be withdrawn upon issuance of the income deposit securities, which will be used to retire the debt.

UAP Holdings' proposed $625 million IDS issuance will consist of common stock and subordinated notes.

The new bank loan and subordinated debt ratings are based on preliminary offering statements and are subject to review upon final documentation. The ratings on both UAP and UAP Holdings have been removed from CreditWatch, where they were placed April 13, 2004.

"Standard & Poor's believes that the IDS structure reflects a more aggressive financial policy," said Standard & Poor's credit analyst Ronald Neysmith. "Previously, UAP did not pay dividends on its common stock. However, as a result of the IDS offering, UAP will be distributing roughly 75% of its cash flow as interest and dividends, thereby materially reducing financial flexibility."

In addition, Standard & Poor's views the common equity within the IDS structure as providing less flexibility than traditional common equity issued independently, given the strong incentive for the issuer to deliver the stated yield that is a feature of the IDS product. As a result, the structure limits UAP's ability to weather potential operating challenges and also reduces the likelihood for future deleveraging.

Standard & Poor's has assigned its 'B+' senior secured bank loan rating and a '1' recovery rating to UAP's proposed $500 million asset-based loan facility due 2009. The asset-based loan facility is rated one notch above the corporate credit rating. This and the '1' recovery rating indicate that lenders can expect full recovery of principal in the event of a bankruptcy. The $150 million second-lien term loan is assigned a 'B' bank loan rating and a recovery rating of '2', which reflects an expectation of substantial recovery of principle (80%-100%) in a default or bankruptcy scenario.

The outlook on Greeley, Colorado-based UAP is negative. About $486 million of lease-adjusted total debt is expected to be outstanding at closing.

The ratings reflect UAP's high debt leverage and its participation in a highly variable and competitive farm supply industry. Somewhat mitigating these factors is the company's national distribution channels and defendable market share.

UAP, with about 350 distribution centers, is a leading national supplier of crop production inputs and services to farmers. Approximately 66% of UAP sales come from crop protection chemicals (fungicides, herbicides, and insecticides) in which the company holds leading market shares by region.

UNITED AIRLINES: Files 1st Reorganization Status Report with Court------------------------------------------------------------------In a Status Report filed with the Court, James H.M. Sprayregen, Esq., at Kirkland & Ellis, says that the United Airlines, Inc. Debtors "continue to apply the tools available in Chapter 11 to a range of complex issues in its efforts to transform itself into a competitive and sustainable enterprise for the long term." However, "there is still work that remains to be completed." The current industry landscape represents "the most challenging business environment in the history of aviation."

Mr. Sprayregen informs the Court that recent fuel price increases have negatively affected all carriers. Due to the Debtors' impaired ability to employ hedging instruments, expenditures for aviation fuel in 2004 will be approximately $450,000,000 more than budgeted in the December 2003 business plan.

The Debtors have rejected 108 leases, realizing $26,900,000 in annual savings. The Debtors have assumed seven leases, including airport leases at Reagan National, Washington Dulles, Denver International and San Francisco. However, the Debtors cannot make final decisions on several unexpired leases, mostly comprised of airport gate and use agreements, because of unresolved issues that will determine the nature and extent of operations at particular airports. Over 450 of the Debtors' remaining 600 unexpired leases were for on-airport locations, like terminal facilities, cargo facilities, flight kitchens, maintenance facilities, hangars and fuel farms. The balance consists of off-airport locations like reservation centers, city ticket offices, sales centers, hotels and office space. The Debtors have distributed "cure stipulation proposals" to 65 airport authority lessors to reduce potential cure costs or amortize the costs over time to improve cash flow.

Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. the Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000)

URS CORP: S&P Upgrades Low-B Ratings and Removes CreditWatch ------------------------------------------------------------Standard & Poor's Ratings Services raised its corporate credit and senior secured bank loan ratings on URS Corp. to 'BB' from 'BB-'. At the same time, Standard & Poor's raised the senior unsecured and senior subordinated debt ratings to 'B+' from 'B'. The ratings were removed from CreditWatch, where they were placed on March 31, 2004. The outlook is positive.

"The upgrade reflects decreased leverage and improved financial flexibility upon completion of URS' equity offering as well as the expectation that the company will exercise a somewhat lessaggressive financial policy in the future," said Standard & Poor's credit analyst Heather Henyon. "Management's commitment to a more conservative financial profile could lead to metrics exceeding Standard & Poor's expectations in the intermediate term, potentially leading to a ratings upgrade."

URS is a leading provider of specialized engineering services, including planning, engineering, architectural, construction, and operations and maintenance (O&M). These services are geared toward the transportation, hazardous waste, water, military, general commercial, and industrial markets. Growth has been driven by the trends of outsourcing and vendor consolidation, which are occurring in a variety of industrial markets. The private hazardous-waste market is experiencing pricing pressures, and municipal and state infrastructure markets bottomed out in 2003 and are beginning to stabilize. Over the intermediate term, the company's key end-markets should experience GDP-like growth.

US AIRWAYS: Negotiates Waiver of Credit Rating Conditions---------------------------------------------------------A key component of US Airways' strategy is the increased usage of regional jets. US Airways uses regional jets to fly into low-density markets where large-jet flying is not economical as well as to replace turbo-props with regional jets to better meet customer preferences. In May 2003, US Airways entered into agreements to purchase a total of 170 regional jets from Bombardier, Inc., and Empresa Brasileira de Aeronautica S.A. US Airways secured financing commitments from General Electric Capital Corporation and from the airframe manufacturers for 85% to 90% of these jets. These commitments are subject to certain credit standards or financial tests, including the requirement that US Airways maintains a minimum corporate credit rating of "B-" by Standard & Poor's or "B3" by Moody's Investor Service, as well as customary conditions precedent.

In a regulatory filing with the Securities and Exchange Commission on May 8, 2004, Anita P. Beier, US Airways' Chief Accounting Officer, reports that, on April 30, 2004, the airline and GE Capital agreed to certain changes in their regional jet financing agreement. These changes provided new conditions precedent for financing for scheduled aircraft deliveries through September 30, 2004. The new conditions precedent replace an existing no material adverse change condition precedent with:

(i) a no MAC since April 30, 2004 condition precedent;

(ii) certain specific financial tests; and

(iii) other conditions precedent.

The financial tests include, but are not limited to, compliance with financial covenants in the ATSB Loan concerning fixed charge ratios and ratios of indebtedness to earnings before interest, debt, and aircraft rent (EBITDAR), as well as minimum EBITDAR requirements for the airline.

GE Capital's financing commitment with respect to regional jets through September 30, 2004 is also conditioned on US Airways being permitted under its ATSB Loan to use its regional jets financed by GE utilizing mortgage debt as cross collateral for the airline's other obligations to GE Capital. In addition, the April 30 amendment contains a provision for financing regional jet deliveries beyond September 30 subject to revised conditions precedent based on the successful implementation of US Airways' transformation plan and the expected financial performance of the restructured Company, both in a manner acceptable to GE Capital.

On May 5, 2004, S&P downgraded US Airways' corporate credit ratings to CCC+. As a result of the downgrade, GE Capital, Embraer and Bombardier have the right to discontinue financing US Airways' regional jet purchases, unless the airline is able to meet alternative minimum financial tests.

According to Ms. Beier, US Airways is not yet able to determine whether it meets these tests. The airline does not presently have alternative sources of financing regional jet purchases nor does it have the ability to purchase regional jets without financing.

US Airways is in negotiations with GE Capital and the aircraft manufacturers to amend or waive the credit rating condition precedent, as well as the alternative minimum financial tests, if necessary. If US Airways is unable to meet the alternative minimum financial tests or unsuccessful in obtaining the waivers or amendments, the airline would be required to pay cancellation fees and liquidated damages of up to $90,000,000 for the remainder of 2004, and $21,000,000 in 2005 if it is unable to obtain financing for the regional jet aircraft scheduled to be delivered during those periods.

In the event that US Airways is unable to obtain financing, Ms. Beier says it will likely be unable to execute its regional jet business plan, which would in turn likely have a material adverse effect on the airline's future liquidity, results of operations and financial condition. (US Airways Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000)

UTEX INDUSTRIES: Looks to Strategic Capital for Financial Advice----------------------------------------------------------------Utex Industries, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, for permission to retain Strategic Capital Corporation as its financial advisor.

In its capacity as the Debtor's financial advisor, Strategic Capital will:

a. advise and counsel regarding the management of corporate activities including, without limitation, the development of strategic and tactical business plans and processes, control of cash and commitments for expenditures;

b. review prepetition financial statements, cash flow analysis, accounts receivable, accounts payable, inventory and related sales and financial projections and assistance in preparation of all statements and schedules, as required in any Initial Report to the United States Trustee;

c. assist with the preparation and conduct of negotiation with creditors, noteholders, potential sources of financing or parties interested in acquiring certain assets of the Debtor;

d. assist with the preparation and analysis of any related valuations, business plans and disclosure statements and in conjunction with counsel a Plan of Reorganization;

Headquartered in Houston, Texas, Utex Industries, Inc. -- http://www.utexind.com/-- has been in the fluid sealing industry since 1940. It has expanded its market base to include: oil and gas, petrochemical, pulp and paper, power generation, fossil and nuclear fuel, agriculture, municipalities and a variety of other industries. The Company filed for chapter 11 protection on March 26, 2004 (Bankr. S.D. Tex. Case No. 04-34427). William A. Wood III, Esq., at Bracewell & Patterson, LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed over $10 million in estimated assets and over $100 million in estimated debts.

(a) serve as local counsel and as attorneys of record in all aspects of the Chapter 11 case and in any adversary proceedings commenced, and provide representation and legal advice to FW Holdings throughout the Chapter 11 case;

(b) consult with the U.S. Trustee, any statutory committee and its counsel, any unofficial committee and its counsel, and all other creditors and parties-in-interest concerning the administration of the case;

(c) take all necessary steps to protect and preserve FW Holdings' estate;

(d) assist in the disclosure and confirmation processes of FW Holdings; and

(e) provide all other legal services required by FW Holdings and assist FW Holdings in discharging its duties as a debtor-in-possession in connection with the Chapter 11 case.

FW Holdings will pay Huddleston a $5,000 retainer. Huddleston propose to keep the retainer in its escrow account until its final fee application is ruled by the Court or the Court otherwise orders its distribution. FW Holdings will pay fees to Huddleston based on the time spent in rendering the legal services.

FW Holdings will be charged with the same hourly rates that Huddleston charges its other clients. The current standard hourly rates of the attorneys and paralegals expected to perform legal services range from $75 to $225 per hour, subject to periodic adjustment. FW Holdings will also reimburse Huddleston for the actual out-of-pocket expenses that it incurs in rendering its services.

Thomas H. Gilpin, Esq., a member of Huddleston, reports that all firm members, associates, paralegals, law clerks and secretaries who provide services to FW Holdings will maintain billing records, setting forth complete and detailed activity descriptions, including a time allotment billed in increments of one-tenth of an hour. Each activity will include a description of the type and subject matter of the activity undertaken and activity descriptions will not be lumped. Travel time will be separately described, work performed while traveling will so indicate and all meetings, hearings and computer assisted legal research for which time is billed will be identified. Activity descriptions will be presented chronologically within each project category and will contain a descriptive billing code.

WESTPOINT STEVENS: Wants Until Nov. 30 to Make Lease Decisions--------------------------------------------------------------The WestPoint Stevens Inc. Debtors ask the Court to further extend the period within which they may assume or reject their unexpired leases through and including November 30, 2004.

John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that the Debtors have reduced the number of their Unexpired Leases from 82 to 63 since the Petition Date.

Mr. Rapisardi asserts that a reasoned determination as to all Unexpired Leases cannot be made at this critical stage in the Debtors' Chapter 11 cases. The Debtors' management -- with the assistance of Kurt Salmon Associates, Inc., and the Debtors' other professionals -- is in the process of re-examining global business strategies and developing an overall business plan for emergence from Chapter 11. These determinations will necessarily impact the value to the Debtors' estates of certain Unexpired Leases and may affect the Debtors' decision whether to assume or reject the Unexpired Leases. Although the Debtors' Unexpired Leases are currently necessary for the continued operation of their businesses, in light of the potential fundamental changes to the Debtors' operations arising from Kurt Salmon's analysis, it is imperative that the Unexpired Leases continue to be reviewed in conjunction with the Debtors' ultimate restructuring plan before a final determination can be made with respect to the assumption or rejection of each individual Unexpired Lease.

Mr. Rapisardi contends that the Debtors should not be compelled to make precipitous decisions regarding the assumption or rejection of the Unexpired Leases. Inadequate time for making informed decisions may result in an inadvertent rejection of a valuable lease or a premature assumption of a burdensome lease. In the absence of an extension, the Debtors will be compelled to assume their Unexpired Leases to avoid rejecting potentially valuable assets, with the resultant imposition of potentially substantial administrative expenses.

Mr. Rapisardi assures the Court that an extension will not prejudice the Lessors as the Debtors have remained current and fully intend to remain current with respect to all outstanding postpetition obligations under the Unexpired Leases. Furthermore, the Debtors do not intend to wait until the end of the proposed extension period to make a determination as to the assumption or rejection of the Unexpired Leases. Rather, the Debtors will continue to evaluate the Unexpired Leases on an ongoing basis as expeditiously as practicable and will file appropriate motions as soon as informed decisions can be made. (WestPoint Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000)

The revolver will primarily be used as standby liquidity to manage commodity risk across all of Williams' business units.

The Tulsa, Oklahoma-based integrated natural gas company had about $11 billion of debt outstanding as of March 31, 2004.

"The negative outlook reflects Williams' weak financial ratios. However, if the ratios improve as forecast in 2004 due to significant debt reduction, the outlook could be revised in the near term and the rating could improve during the outlook's three-year time horizon," said Standard & Poor's credit analyst Jeffrey Wolinsky.

"On the other hand, if cash usage at the company's Power subsidiary is considerably higher than expectations or financial ratios fall considerably below expectations, the rating could be lowered," added Mr. Wolinsky.

The corporate credit rating on Williams reflects the company's highly leveraged financial condition, the uncertain financial performance of its Power subsidiary (formerly known as Energy Marketing and Trading), and the consolidated creditworthiness of its own operations and those of its subsidiaries.

The risks are partially offset by a substantial debt reduction plan, an improving liquidity profile, and the stability of its FERC-regulated natural gas pipeline business.

The 'BB-' rating on the revolver is one notch higher than the corporate credit rating on Williams. This and the '1' recovery rating indicate a high expectation of full recovery of principal in the event of a default.

WOMEN FIRST: Gets OK to Pay Vendors' $100,000 Prepetition Claims----------------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware gave its stamp of approval to Women First Healthcare, Inc.'s request to pay the prepetition claims of its critical vendors.

On the Petition Date, the Debtors owed an aggregate amount of $100,000 for prepetition goods and services provided by the critical vendors.

The Debtor has identified certain Critical Vendors who are absolutely essential to its business operations. Replacing such Critical Vendors may, as a result of market conditions, be disruptive, expensive or impossible for the Debtor, or involve costs that would exceed the amount of the prepetition liability.

c. Business Operations that provides administrative assistant to the Chief Financing Officer and the Vice President.

The Debtor believes that any interruption in the supply of critical goods and services would immediately jeopardize its ability to maintain its operations and, in turn, consummate the proposed sales of the assets during the chapter 11 case. Under these circumstances, the Debtor believes that it is best to pay the Critical Vendors to ensure that the necessary goods and services continue to be supplied without interruption on a postpetition basis.

Headquartered in San Diego, California, Women First HealthCare, Inc. -- http://www.womenfirst.com/-- is a specialty pharmaceutical company dedicated to improve the health and well-being of midlife women. The Company filed for chapter 11 protection on April 29, 2004 (Bankr. Del. Case No. 04-11278). Michael R. Nestor, Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt & Taylor represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $49,089,000 in total assets and $73,590,000 in total debts.

Gibson Dunn provided support to the Debtors' Ethics Office during the Ethics Office's Court-suggested expansion. With that support, the Debtors asked Gibson Dunn to staff their confidential whistleblower line, respond to inquiries to the Ethics Office, and conduct internal investigations based on reports to the Ethics Office.

B. Clear World Investigation

The Debtors asked Gibson Dunn to:

(1) assist in investigating an ethics complaint;

(2) represent them in related depositions; and

(3) evaluate their potential exposure arising out of a contract with Clear World Communications Corp.

C. Network Enhanced Technologies

Gibson Dunn will assist the Debtors in efforts to obtain payment of an administrative expense claim against Network Enhanced Technologies, which is currently in its own Chapter 11 case.

D. Department of Justice

Gibson Dunn will assist in the production of documents sought by the U.S. Department of Justice and other evidence relating to alleged collusion among telecommunications companies headquartered in a foreign nation.

Gibson Dunn's compensation will be based on the hourly rates of the firm's professionals, subject to periodic adjustment for normal rate increases and promotions. The Firm's hourly billing rates are:

Partners $445 - 850 Associates 210 - 485 Paralegals 85 - 260

Wayne A. Schrader, Esq., a member of Gibson & Dunn, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI-- http://www.worldcom.com-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts.

On April 20, the company (WCOEQ, MCWEQ) formally emerged from U.S. Chapter 11 protection as MCI, Inc. This emergence signifies that MCI's plan of reorganization, confirmed on October 31, 2003, by the U. S. Bankruptcy Court for the Southern District of New York is now effective and the company has begun to distribute securities and cash to its creditors. (Worldcom Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000)

WRENN ASSOCIATES: William S. Gannon Serves as Bankruptcy Counsel----------------------------------------------------------------Wrenn Associates, Inc., is asking the U.S. Bankruptcy Court for the District of New Hampshire for approval to retain William S. Gannon PLLC as its chapter 11 counsel.

The Debtor anticipates William S. Gannon, Esq., will:

a) give the Debtor legal advice with respect to its powers and duties as debtor-in-possession in the continued operation of its business and management of its property;

b) assist Debtor as debtor-in-possession to develop a plan pursuant to 11 U.S.C. Section 1121 and Section 1123, and to negotiate with the creditors' committees and creditors, as necessary;

c) file necessary adversary proceedings for avoidance and recovery of preferential and, or fraudulent transfers, turnover of property of the estate, objections to allowance of claims, etc.;

d) represent the Debtor as debtor-in-possession in all proceedings before the Court;

e) prepare on behalf of the Debtor as debtor-in-possession necessary applications, answers, orders, reports, and legal papers; and

f) perform all other legal services for the Debtor which may be necessary herein.

The hourly rates to be charged by the Firm will range from$65 to $300 per hour. The Debtor paid the Firm approximately $7,000 for bankruptcy advice and guidance it provided during the 30 days preceding the Petition Date.

Headquartered in Merrimack, New Hampshire, Wrenn Associates, Inc. -- http://www.wrenn.com/-- is a construction management firm. The Company filed for chapter 11 protection on April 16, 2004 (Bankr. D. N.H. Case No. 04-11408). William S. Gannon, Esq., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $4,037,000 in total assets and $7,778,494 in total debts.

* Perlmuter & Mendeles Join Trenwith's Corp. Restructuring Group----------------------------------------------------------------Trenwith Securities, LLC, an independent investment banking affiliate of BDO Seidman LLP, one of the nation's leading professional service organizations, has announced that Ira J. Perlmuter and Robert Mendeles have joined the firm's Corporate Restructuring Group as managing directors. The two new hires, each based in the firm's New York office, will be responsible for advising Trenwith clients on in- and out-of-court debt restructurings, capital raising, bankruptcy and distressed M&A, and bankruptcy advisory work.

"The addition of Ira and Bob to our team will augment Trenwith's existing corporate restructuring capabilities," said Ron Ainsworth, President of Trenwith Securities. "During the difficult economy of the past few years, Trenwith has assisted numerous clients in successfully marketing the assets of distressed businesses. With the addition of these two very experienced professionals, we will be able to further expand the advisory services we can provide our clients in the restructuring arena."

Ira J. Perlmuter, 41, is a Managing Director in Trenwith's New York office, and will lead the firm's East Coast Bankruptcy and Restructuring practice. Prior to joining Trenwith, Ira founded and ran Cove Capital Advisors, Inc., a boutique financial restructuring and turnaround advisory firm that advised on over $6 billion of assignments for JP Morgan Chase Bank, Korea Exchange Bank, Metropolitan National Bank, Korea Asset Management Corporation, Epstein, Becker & Green, PC, and numerous private clients. Cove Capital also served as Creditor Trustee of the $600 million, Daewoo International (America) Corp. Creditor Trust. Prior to founding Cove Capital, Ira was a Vice President in The Chase Manhattan Bank's Restructuring Group where he restructured and/or sold over $1.5 billion of troubled debt. A member of the Turnaround Management Association and the American Bankruptcy Institute, Mr. Perlmuter received a BA in Psychology from Brandeis University and an MBA in Finance from the Stern School of Business at NYU.

Robert Mendeles, 44, is a Managing Director of the New York office and has been a banker in the financial institutions and financial restructuring sectors for over fifteen years. Prior to joining Trenwith, Bob ran the Financial Institutions Lending Group at Canadian Imperial Bank of Commerce ("CIBC") where he was responsible for the restructurings of Conseco and Finova. He began his banking career in 1986 in the Real Estate Group at The Chase Manhattan Bank, N.A., where he specialized in mortgage companies and other specialty finance companies. In that capacity, Bob was the banker on the $5 billion, Lomas bankruptcy. In 1993, Mr. Mendeles joined Union Bank of Switzerland (UBS) to start and co-head a new specialty-finance lending unit; Bob grew the unit's loan portfolio to $1.5 billion. At UBS, Bob was responsible for the multi-billion dollar United Companies, Avis Rent-A-Car and Conti-Mortgage restructurings. He holds an MBA from Fordham University and is a member of the Turnaround Management Association and American Bankruptcy Institution.

About Trenwith Securities LLC

Trenwith Securities is a premier investment banking firm serving the middle market through institutional private placements of subordinated debt and equity, M&A advisory services, corporate restructuring services, recapitalizations and private equity investments. Established in 1981, the firm maintains a domestic presence in five U.S. offices while providing clients access to the global marketplace through approximately 600 BDO international offices around the world. Trenwith is an independent investment banking affiliate of BDO Seidman, LLP, a member firm of BDO International. For more information visit http://www.trenwith.com/

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Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report.

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